Ministry of Industry and Information: The steel industry will no longer issue new restraint policies

"As the elimination of backwardness, mergers and reorganizations, and the regulation of steel production and operation work are further advanced, and the stability and continuity of existing policies are maintained, we suggest that the steel industry will no longer introduce new stimulus policies or restraint policies."

On September 15, Luo Tiejun, deputy director of the Department of Raw Materials Industry of the Ministry of Industry and Information Technology, expressed that when he attended the 2010 (fifth) International Steel City Forum.

He pointed out that under the existing policy guidance and market trends, a market reversal mechanism will be formed to promote structural adjustment of the steel industry, curb excessive growth in investment, and change the mode of development. Through 2-3 years of hard work, the steel industry will Towards a more healthy direction.

On the same day, Huang Guohua, Director of the Statistical Analysis Division of the General Statistics Department of the General Administration of Customs of China, also stated that in terms of steel exports, China is unlikely to further increase export tariffs in the short term and will not implement policies to support steel exports unless exports completely stagnate.

Since the beginning of this year, key industries such as iron and steel have entered "deep-control" deepwater areas, especially for the elimination of outdated production capacity, and the competent authorities have even resorted to policy "jumping" to strengthen implementation.

In 2007, the State Council’s “Comprehensive Work Program for Energy Saving and Emission Reduction” (No. 5) stipulated that: The phase-out targets of the iron and steel industry are: 300 cubic meters or less of blast furnace capacity of 100 million tons; 20 tons and below of converters, electric furnace capacity of 55 million tons .

In 2010, the State Council issued Circular No. 7: Before the end of 2010, 300 cubic meters or less of blast furnaces should be phased out; 20 tons or less of converters and electric furnaces; before the end of 2011, 400 cubic meters or less of blast furnaces, and 30 tons or less of converters and electric furnaces.

“In early August this year, our Ministry of Industry and Information Technology has announced to the public the list of enterprises that have eliminated backward production capacity. According to the plan, in 2010, 35.24 million tons of backward iron-making capacity will be eliminated and 8.76 million tons of steelmaking capacity will be eliminated. This target should not be a problem within this year.” On the 15th day, Luo Tiejun told the author.

Regarding the “warning of power cuts” action that is currently taking place in various parts of the country, he said that this is a temporary step-by-step measure involving various local assessment indicators and it is estimated that it will be completed by the end of the year.

Not long ago, Mr. Luo Bingsheng, executive vice chairman of China Iron and Steel Association, pointed out to the author that he opposes the one-size-fits-all approach and believes that the curtailment of power curtailment is only a one-time solution. “Long-term cure still needs to complete the elimination of backward tasks first.”

“The key to elimination is not to simply stop, but to dismantle.” On the 15th, Luo Tiejun also disclosed that “the main force dismantled this year is 200-300 cubic meters of blast furnaces, and 300-400 cubic meters are still dismantled. Eliminating this batch of blast furnaces and preventing the resurgence of fire will be the focus of work next year."

He also said that China's crude steel production will show a declining trend this year. The annual output is expected to reach 620-630 million tons, and the export volume is expected to reach 40 million tons. Although it is 60% higher than in 2009, it is still 30% lower than in 2007 and 2008.

The entire steel industry will enter the period of low profit. From January to July 2010, the profit rate of large and medium-sized steel companies in the China Steel Association statistics is 3.14%, which is lower than the national average profit rate of 6.1%. In 2007, the profit rate of China's large and medium-sized steel enterprises was 7.26%; in 2008 and 2009, it dropped to 3.23% and 2.46%, respectively.