【Steel Industry】Faces Challenges: Emphasizing Quality Over Competition

Preventing involution and strengthening self-discipline, the industry discusses the path to high-quality development of the steel industry.

2024 is a key year for deep adjustments in the steel industry, with a series of new situations, changes, and challenges continuously emerging. On the 20th, the seventh meeting of the sixth member congress of the China Iron and Steel Association (hereinafter referred to as "CISA") was held in Beijing. Experts attending pointed out that the current development of the steel industry faces problems such as insufficient demand and obvious "involutionary" competition. Steel enterprises should strengthen self-discipline and prevent "involutionary" vicious competition. Chinese steel will continue to demonstrate strong resilience and steadily progress on the path of high-quality development. In modern steelmaking enterprises, workers use graphite electrodes to speed up smelting. As the industry advances, demand for graphite electrodes rises.

CISA President and Chairman of China Mineral Resources Group, Yao Lin, stated that the world economy will continue to recover moderately in 2024, but risks such as unbalanced development and increasing uncertainty are more prominent. The global economic growth momentum is insufficient, and the recovery of steel demand is below expectations. "From the perspective of industry operation, the main contradiction currently is that total supply capacity is abundant while demand intensity is weakening. A new dynamic balance mechanism between supply and demand has yet to be established, making it very difficult to enhance operational efficiency," Yao Lin pointed out. He noted that the steel industry currently faces unsatisfactory self-discipline effects, declining enterprise efficiency, high costs of iron ore prices, and increasing steel exports.

Yao Lin indicated that, on one hand, the reform and development of the steel industry still need to overcome challenges. The construction of a new balance between market supply and demand, adjustments in industrial structure and product variety structure, resource security system construction, coordination along the industrial chain and supply chain, and development of key core technologies all require perseverance and breakthroughs. On the other hand, China will continue to maintain its status as the world’s largest steel manufacturing and consumption center. Steel enterprises have remained relatively stable in production and operations in recent years, and the overall asset status remains good, providing a solid foundation for development. Enterprises should further strengthen self-discipline and prevent "involutionary" vicious competition. Chinese steel will continue to demonstrate strong resilience and steadily progress on the path of high-quality development.

Zhang Haideng, a first-level inspector of the Raw Materials Industry Department of the Ministry of Industry and Information Technology, stated that the current phenomenon of "involutionary" competition in the steel industry is evident and has become a prominent issue restricting the healthy development of the industry. "We must actively adapt to new situations and requirements, resolutely shift from pursuing scale and market share expansion to focusing on product quality and service experience to meet the diverse needs of downstream; emphasize technological innovation, increase services for the research and development of new technologies and new products, cultivate and develop new momentum in the industry, and enhance core competitiveness; we should enhance the sense of responsibility for industry self-discipline, reasonably control production rhythm and inventory levels, and jointly maintain market order and stability," said Zhang Haideng.

Regarding the green development of the steel industry, Zhang Haolong, deputy director of the Department of Atmospheric Environment of the Ministry of Ecology and Environment, stated that air pollution prevention and control has significantly contributed to the green transformation of the steel industry, with continuous improvement in air quality and a significant enhancement in the industry’s green development level, promoting the development of new productive forces. However, due to structural problems in the industry and the severe situation of declining demand, the industry has objectively entered a stage of optimizing quality from incremental development. In the next step, the Ministry of Ecology and Environment will continue to promote high-quality development of the steel industry through high-level ecological and environmental protection, firmly ensure the successful completion of transformation tasks, and use a "combination punch" to promote the green transformation of the industry while continuously improving the technical policy system of the steel industry.

Zhao Minge, the new president of CISA and chairman of Shougang Group, stated that in 2025, CISA will focus on five areas of work: adhering to technological innovation leadership, forming more practices of steel enterprises developing new productive forces; focusing on key tasks in the industry, deeply promoting green and low-carbon transformation, and enhancing the basic capabilities and competitive strength of the industry; effectively strengthening industry self-discipline and maintaining market order; cooperating sincerely, working hand in hand, and promoting the implementation of a number of joint cooperation projects; adhering to principles to achieve standardized, orderly, and stable exports.

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