Industry News

He Wenbo, Party Secretary and Executive Chairman of China Iron and Steel Association, introduced the development situation of China's iron and steel industry and put forward his opinions

1.The steel consumption structure continues to optimize, the proportion of steel consumption in the manufacturing industry continues to increase, and China's steel market shows a strong and tough

2. The total steel consumption has reached the peak, the total decline is an inevitable trend.From speed to quality, from total volume to variety, the shift in focus is under way.

3. Efficient growth is an inevitable requirement for high-quality development. It is necessary to consider accelerating the introduction of carbon constraints and reevaluate the effectiveness of "capacity" governance.

4. No matter how many tricks, vigorously promote the recycling of recycled steel is always the first choice.

5. The excellent characteristics of steel materials (cost performance and recyclable characteristics) are far from being fully developed and utilized, and the space of "material upgrading and material replacement" is infinite and there is a long way to go.

 He said that the steel industry should focus on a fundamental task: to improve the industrial basic capacity and industrial chain level. Adhere to the two major development themes: green development and intelligent manufacturing. We will focus on solving the pain points of the three major industries: controlling production capacity expansion, promoting industrial concentration, and ensuring resource security. Continue to promote the internationalization of China's steel industry

 At present, the macro economy faces four "pass pressure": first, whether it can successfully get rid of the dependence on real estate; second, whether it can fundamentally get rid of the constraint of diminishing returns in industry (manufacturing); third, the problem of insufficient consumption may be prolonged; fourth, the severe external challenge: the containment from the external system may be upgraded at any time.

"Pass breakthrough" must do three major things: the first is to accelerate the construction of a new development pattern (to accelerate the realization of high-level science and technology and accelerate the construction of modern industrial system); the second is to focus on expanding domestic demand, mainly expanding consumption; the third is to resolutely stop the real estate bubble, but to accelerate the eradication of dependence on real estate. He stressed that he has huge potential, long-term growth and strong resilience.

 Looking into the future, he believes that we should adhere to the organic coordination between short-term policies and long-term policies, pay more attention to long-term, change the mode, adjust the structure, improve quality, increase efficiency, "promote stability with progress", seek stability in progress and rise, and effectively resolve risks in progress and rise.

 In order to cope with the downward pressure of the industry and maintain the stable operation of the industry, we should strengthen our work from four aspects: First, unswervingly follow the path of high-quality development. Iron and steel enterprises should take new measures on the basis of the preliminary work and show new actions, transform resource advantages into industrial advantages, and transform individual advantages into overall advantages. Secondly, strengthen the coordination, reduce the internal volume, and unswervingly take the road of industry self-discipline and coordinated development. The top enterprises in the iron and steel industry should play a benchmarking role, strengthen industry self-discipline and market coordination, jointly optimize market supply and demand, and strive to achieve flexible supply. Third, strengthen the service capacity of the strategic supply chain, and build a fast response, stable and efficient steel supply chain. Fourth, strengthen industrial innovation and scientific and technological innovation, and adhere to the road of green, energy conservation and environmental protection.

 He called on iron and steel enterprises to actively respond to the call, promote industry self-discipline, reduce disorderly competition and non-essential hemorrhagic production, consolidate the core competitiveness of products with technological innovation, accelerate the transformation to high-end, green, efficient and intelligent, and firmly take the road of high-quality development.

 Review of the steel market in 2023 said that the annual steel prices continue to fall ladder, raw materials are stronger than steel, industry benefits to a new low.

 Looking ahead to 2024, in terms of overseas consumption, it is expected for overseas steel consumption to slow down, leaving China's export space is limited, and the national steel export declined year-on-year.

 In terms of domestic environment, China's GDP is expected to grow by 5.0% year on year. Investment in fixed assets grew by 4.5%, real estate development by 6%, manufacturing by 6.8% and infrastructure by 7.0%.

 Domestic consumption, China's steel consumption is expected to be basically flat year-on-year, the variety structure continues to upgrade and adjust. The biggest variable of the industry is still supply, supply determines the profit, but also determines the overall price level of steel in 2024. Under the no incremental support of domestic and foreign demand, moderate supply reduction can gradually improve the efficiency of the industry.

 In terms of raw materials, global iron ore production is expected to increase by 62 million tons year on year, consumption increases by 26 million tons, iron ore supply is slightly loose; growth rate of coking coal production is slowing and supply remains loose; coke production is continuously high, price is weak; scrap supply increases moderately and price runs smoothly.

 Iron ore prices are expected to fluctuate between $90 and $100 per ton in 2024, a result that requires production discipline within the industry. In terms of finished products, thread is expected to run between 4300-4500 yuan / ton. Although the real estate is weak, the demand for infrastructure is good, the cost support is obvious, and the thread supply may decrease, and the coil difference in 2024 should fluctuate around 100 yuan / ton, stimulating domestic demand, and the profit of steel should increase by 100 yuan / ton compared with 2023.

 Iron ore price has little to do with supply and demand, and there are three main factors: technical, financial and regulatory factors. In steel, prices are affected by the following factors: costs will not fall significantly next year; the downstream industry tolerance has improved compared to this year, the economic work conference proposed a series of policies to stabilize growth for next year; the industry downturn will guide the industry production self-discipline; and the Federal Reserve will start a loose monetary policy.

 Price forecast, the point of view is not sad, not happy, the price center moved slightly down. It is estimated that the average price of rebar is 3900 yuan / ton, and the range is 3500 yuan / ton-4400 yuan / ton. The hot coil is expected to increase by 100 yuan / ton on the basis of thread, and the coil difference is low, mainly due to the increase of hot coil production. In terms of raw materials, the price center of iron ore is expected to be 120 US dollars / ton, the price range is expected to be 90-140 US dollars / ton, coking coal is expected to be 1800-2400 yuan / ton, coke is expected to be 1900-2700 yuan / ton. On the profit side, the downside cycle is not over yet, and it is possible that 50% of steel mills are expected to lose money next year.

 Forecast next year rebar price center in 3900 near, low in 3750 around, high in 4500 around. Compared with this year, the price fluctuation range will be wider and wider.

1. The steel consumption structure has been continuously optimized, the proportion of steel consumption in the manufacturing industry continues to increase, and China's steel market has shown strong resilience.

2. The total steel consumption has reached the peak, the total decline is an inevitable trend. From speed to quality, from total volume to variety, the shift in focus is under way.

3. Efficient growth is an inevitable requirement for high-quality development. It is necessary to consider accelerating the introduction of carbon constraints and reevaluate the effectiveness of "capacity" governance.

4. No matter how many tricks, vigorously promote the recycling of recycled steel is always the first choice.

5. The excellent characteristics of steel materials (cost performance and recyclable characteristics) are far from being fully developed and utilized, and the space of "material upgrading and material replacement" is infinite and there is a long way to go.

He said that the steel industry should focus on a fundamental task: to improve the industrial basic capacity and industrial chain level. Adhere to the two major development themes: green development and intelligent manufacturing. We will focus on solving the pain points of the three major industries: controlling production capacity expansion, promoting industrial concentration, and ensuring resource security. Continue to promote the internationalization of China's steel industry.

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