After 10 years of savage growth that lasted for more than 10 years, the iron and steel industry ushered in the test of the era of meager profits. From the previous high growth, high profitability to today's low prices, low profits, steel companies face life and death test. At the 8th China International Steel Congress held recently, after a brainstorming on the theme of reform, innovation, and cooperation, the transformation path for the steel industry to survive through reforms has gradually become clear. 
Su Bo, deputy director of the Ministry of Industry and Information Technology, said at the meeting that the steel industry must adapt to the new situation and accelerate the adjustment of its strategic structure and transformation and upgrading. Next, the Ministry of Industry and Information Technology will focus its work on resolving excess capacity, promoting technological progress and structural optimization, promoting product upgrading and upgrading, and continuously improving the level of internationalization. It will establish an early warning mechanism for iron and steel industry productivity and explore the integration of steel industry with equipment manufacturing and services. The possibility of exporting supports strong steel companies and downstream equipment manufacturers to “go globalâ€.
The heavy accumulation of hardships Su Bo said that after the reform and opening up, especially in the rapid development of the past decade, China's iron and steel industry has achieved remarkable achievements in its development. At present, China has become the world's largest producer and consumer of steel.
Similar to the overall situation of the industry, although the steel industry has entered the ranks of major powers, there are still some outstanding problems in the rapid development. In recent years, due to the continuous decline in the ex-factory prices of industrial products and the rapid rise in integrated production costs, the production and operation of iron and steel enterprises have encountered great difficulties. In the first quarter of this year, the large and medium-sized steel companies that were the key statistics of the China Iron and Steel Association lost more than 2.3 billion yuan, and the cumulative loss exceeded 45%.
For the cause of the steel industry, Yu Yong, chairman of Hebei Iron and Steel Group, believes that the earnings of steel companies have continued to decline. On the surface, it is caused by the external factors of the growth of the national economy and the slowdown in the growth of steel demand. However, in reality, the market problem is merely an appearance. The root cause of the unrelenting and troubled iron and steel companies lies in the company itself.
“In the past, sustained high-profit, high-growth market conditions have shielded the deep problems of historical accumulation, long-term high debt-supported development models, high-cost-supported production methods, inefficient resource allocation models, and disconnected users and product structure upgrades. The marketing model allows us to accumulate excessively high additional costs and hidden costs throughout the industry chain, which restricts the enhancement of competitiveness.†Yu Yong said, in other words, the steel industry has been in technology, equipment, and The "productivity" level has become more and more in line with international standards, but the "production relations" areas such as management concepts, business models, and institutional mechanisms have lagged behind.
However, with the accumulation and outbreak of these deep-seated contradictions, domestic steel market prices have fallen sharply in the past two years, and the economic benefits of the industry have declined sharply. Last year, the settlement price of steel products sold by members of the China Steel Association fell by 1,026 yuan per ton, and the steel price continued to decline. With the double pressure of rising raw material prices, steel companies face unprecedented difficulties in their production and operations.
The signs of reform to survive indicate that from the relative shortage of thirty years ago to the current serious excess, the iron and steel industry must truly look beyond the current plight and face challenges in order to use an international perspective and market-oriented thinking. The methods of reform and innovation stimulate internal motivation and accelerate the transformation and upgrading.
Yu Yong believes that the current window period for the comprehensive deepening of reform of steel enterprises has been opened, and it has entered a period of strategic transformation in which reform seeks survival. In order to comprehensively deepen reforms, it is necessary to minimize high additional costs and non-productive costs, increase cost control, and at the same time increase the ability to create products and cultivate differentiated advantages in channels.
According to Xu Lejiang, president of the China Iron and Steel Association, Chinese steel companies must also deepen their own reforms and establish a dominant market position. This is an inexhaustible motive force for speeding up structural adjustments, changing development patterns, and enhancing competitiveness. “At present, both state-owned and private steel companies have a lot of problems in establishing and improving modern enterprise systems. The state-owned and controlled economies have large volumes and difficulties in digestion are the problems that the industry reform must face.â€
According to statistics, China's 29 steel listed companies account for 30% of the country's crude steel production, of which the total assets of state-owned and holding companies account for 58% of the total assets of listed companies.
However, the good news is that under the market retreat mechanism, the Chinese steel industry is making some positive changes in pushing forward reforms. For example, in order to develop mixed ownership, most steel companies are developing in the direction of socialized and public companies; in order to standardize the corporate governance structure and improve corporate decision-making and risk prevention mechanisms, many companies have accelerated the pace of the "three systems" reform.
Gong Sheng, president of Jiangsu Shagang Group, believes that the reform and innovation of iron and steel enterprises must focus on doing a better and stronger main business, achieving an intensive scale of production, diversifying their business models, upgrading their product structure, maximizing economic efficiency, and emancipating the mind. Break through the model, expand the field, form a new production and operation management characteristics, and then realize the sustainable development of the company.
Escort Su Bo said that the Ministry of Industry and Information Technology, as the competent department of the industry, will focus on the following four aspects at present and in the coming period:
The first is to resolve the excess production capacity. The serious overcapacity is the most prominent problem in the current steel industry. It will adopt comprehensive measures, strictly control new production capacity, speed up the elimination of backward production capacity, strengthen industry standard management, establish an early warning mechanism for iron and steel industry production, and create a fair competition market environment. It is imperative to strictly control new production capacity, strictly control the approval of newly-built steel projects, and guide local authorities to clean up projects under construction. Strict implementation of equal or reduced replacement principles should be implemented for new projects. This year, 27 million tons of backward steel capacity will be eliminated, ensuring that the “twelfth five-year plan†will be eliminated one year ahead of schedule. From 2013 to the end of 2017, the steel production capacity will be reduced by more than 80 million tons, so that the steel production capacity utilization rate will reach a suitable level.
The second is to continuously promote technological progress and structural optimization. This is the core requirement for the transformation and upgrading of the steel industry. Give full play to the guiding and supporting role of scientific and technological innovation, focus on improving innovation capabilities, accelerate the improvement of technological innovation systems, guide the iron and steel enterprises to establish a strategic alliance for industrial technological innovation, strengthen the development of key technologies and common technologies, and support enterprises in carrying out benchmarking and potential work in steel The industry focuses on the promotion and application of new technologies such as intelligent steelmaking technology. At the same time, it supports the cross-regional merger and reorganization of advantageous companies, encourages powerful companies to conduct cross-border mergers and acquisitions, optimizes resource allocation globally, and supports the orderly transfer of steel production capacity to the central and western regions.
The third is to comprehensively promote product upgrading. In recent years, the Ministry of Industry and Information Technology and the Ministry of Housing and Urban-Rural Development have vigorously promoted the application of high-strength steel bars and achieved significant social results. Next, they will continue to strengthen cooperation with the Ministry of Housing and Urban-Rural Development, promote the use of 400 MPa or more high-strength steel bars, and eliminate 335 MPa hot-rolled strips. Reinforcing steel, while speeding up the establishment of a high performance electrical steel production and application demonstration cluster.
The fourth is to continuously improve the level of internationalization. The transformation and upgrading of China's steel industry cannot be separated from the background of globalization. It will study and solve the problem of restrictions on foreign investment in the steel industry, explore the implementation of negative list management models, and support domestic steel companies in introducing advanced foreign technology, management concepts and intellectual resources. Guide foreign investment to the central and western regions, establish a sound trade and investment platform, support strong steel companies to set up R&D institutions, production bases and marketing networks overseas, encourage and guide domestic qualified enterprises to implement overseas iron mines in a planned and systematic manner. Resource development, the integration of resources and value chains, the exploration of the feasibility of the combined export of steel industry and equipment manufacturing and services, and the support of powerful steel companies to join the downstream equipment manufacturers to “go globalâ€.