Industrial event

The status quo and development trend of China's iron and steel industry in the period of the 14th Five-Year Plan

Tuesday, 14 March 2023
2
3620
0

The 14th Five-Year Plan period is a crucial period for China to achieve the goal of carbon peaking and carbon neutrality, as well as an important stage for the high-quality development of the steel industry. On the whole, the steel industry is still in the development stage of supply-side structural reform and demand-side management in parallel during the "14th Five-Year Plan". The steel industry still has the problems of weak resource guarantee ability and low product quality level.

In the future, China's steel industry will take building a new development pattern of "double circulation" as the main line, comprehensively deepen the structural reform of the supply side, and accelerate the transformation from a major steel producer to a world-class steel power. At the same time, we will strengthen environmental protection and ecological civilization construction, and promote green, low-carbon and high-quality development. We will strengthen capacity building for industrial upgrading and technological innovation, focusing on improving quality and efficiency. During the 13th Five-Year Plan period, China's iron and steel industry continued to promote the supply-side structural reform, the steel industry continued to improve the quality and efficiency level, and the main economic indicators grew steadily. According to data from the National Development and Reform Commission, during the 14th Five-Year Plan period, China has deepened the supply-side structural reform of the iron and steel industry, adhered to the eight-word policy of "consolidating, strengthening, upgrading and smoothing", and constantly improved the policy system, strengthened policy guidance, optimized the business environment and innovated management methods. Notable results have been achieved. Concrete look: (1) Chinese iron and steel industry production continues to grow; (2) Our country's steel output proportion in the world total output was increased constantly; (3) Increasing profitability of iron and steel enterprises; (4) Industrial layout is further optimized. In recent years, our country iron and steel industry output increases steadily. In 2021, China's crude steel output was 1,032.79 million tons, down 3 percent year on year and up 5.2 percent year on year. Steel output was 1,336.67 million tons, up 0.6% and 7.1 percentage points lower than last year. Coke production was 464.46 million tons, down 2.2 percent from 0.04 percent in the previous year. The output of ferroalloy was 34.76 million tons, down 4.4% or 1.7 percentage points. According to customs statistics, steel exports 66.9 million tons, up 24.6%; Imports were 14.27 million tons, down 29.5 percent. Iron ore imports were 112.432 million tons, down 3.9%. In 2021, according to the statistics of China Iron and Steel Association, the member enterprises completed 322 million tons of crude steel production, with a year-on-year growth of 4.45%; The profit margin of sales in the whole society was 6.37%, down 0.43 percentage points from 2020. In recent years, the state has put forward higher requirements for environmental protection, energy conservation and emission reduction, and the steel industry is facing the pressure of transformation and upgrading. With the deepening of the supply-side structural reform, the popularity of the concept of green and low-carbon development, and the increasing pressure of energy conservation and emission reduction, the green, low-carbon and high-quality development of the steel industry faces new opportunities and challenges. In 2021, the cumulative operating revenue of key large and medium-sized iron and steel enterprises was 6.93 trillion yuan, up 32.7% year on year; The cumulative profit reached a record high of 352.4 billion yuan, up 59.7 percent year on year; Sales profit margin reached 5.08%, an increase of 0.85 percentage points over 2020. During the "14th Five-Year Plan" period, the downstream industry steel demand growth slowed down and environmental restrictions on production and other factors, steel product prices fell sharply. On the one hand, the profit level of Chinese steel industry has decreased obviously; On the other hand, due to the imbalance between supply and demand in the market, steel prices rose sharply in a short period of time, resulting in a significant contraction of corporate profits. In 2021, the average cost index of pig iron was 167.4, up 45.2% year on year. The production cost including tax of three grade rebar steel and hot rolled coil tonnage steel was 4480 yuan/ton and 4665 yuan/ton respectively, which increased by 1075 yuan/ton and 1131 yuan/ton respectively compared with the same period of last year, increasing by 35.7% and 36.2% respectively. With global warming and increasing carbon emissions, the goal of "double carbon" has become a universal consensus of the international community. As the basic industry of the national economy, the iron and steel industry is an important industry supporting the development of the national economy and the construction of national defense. The iron and steel products produced by the industry can provide a large number of qualified raw materials for industrial production and ensure the orderly progress of industrial production. The requirements put forward by the National Development and Reform Commission indicate that the country will adjust the structure of the steel industry and embark on a development road from "extensive" to "fine". Reducing the output of crude steel is only a means, but its ultimate purpose is to make the product structure of steel production enterprises with the changes in downstream demand for corresponding optimization and adjustment, steel profits will also be increased with the increase of high value-added product lines and gradually improve.