At a recent industry conference, Li Xinchuang, president of the Metallurgical Industry Planning and Research Institute, said that China's crude steel production has been in the peak arc top downward zone, from the medium and long-term overall point of view, has shown a trend of "arc top + falling channel", but does not rule out the recovery of fluctuations in individual years. Pig iron production shows the same characteristics, and with the gradual increase of scrap resources, pig iron production will decline faster on average than crude steel in a long cycle.
The author believes that during the "Thirteenth Five-Year Plan" period, steel companies should pay attention to the relevant data changes of the descending channel in the arc top area, accelerate transformation and upgrading and drive innovation, and overcome difficulties in solving a series of thorny problems such as overcapacity, improving the quality of life and industrial concentration, and achieve a breakthrough in difficulties.
One change: crude steel production peaked
Crude steel production this year will be 806 million tonnes, down 2.1% from 823 million tonnes in 2014, forecasts show. Crude steel production may be 783 million tons in 2016, 702 million tons in 2020, 624 million tons in 2025 and 560 million tons in 2030. Consumption will also decline in tandem. China's steel consumption peaked at 702 million tons in 2014 and may fall to 597 million tons by 2020, 552 million tons in 2025 and 492 million tons in 2030. According to the above data, it can be speculated that the annual crude steel production in the next 15 years will generally decline, and the steel industry should do subtraction and reduce "fertilizer" to strengthen the body. This is an unstoppable historical trend.
The second change: the crude steel stock has reached the level of complete industrialization
Combined with the "Twelfth Five-Year Plan" of steel and the prediction of relevant experts, crude steel production in 2015~2020 will enter the peak arc top area. The top of the arc is generally an arc-shaped area, and the top of the arc is the highest point. Now, crude steel production has begun to decline along the highest point, the question is what is the radius of movement to form an arc, if the radius is large, the arc movement is relatively gentle if the radius is relatively small, the arc movement is relatively sharp. There are no specific research data and results on the arc radius of the peak arc apex region, but there are two landmark data to pay attention to.
First, the total stock of crude steel. From the founding of New China in 1949, by 2014, China's crude steel stock was 7.883 billion tons. In 2015, net exports should be about 700 million tons, so the cumulative stock of crude steel is 8.5 billion tons, while the crude steel stock of developed countries when industrialization is 7.1 billion tons in the United States, 3.8 billion tons in Japan, and 5.6 billion tons in the former Soviet Union. China has clearly exceeded the total crude steel reserves of these three countries when they completed industrialization, and we still have 10 years to achieve our industrialization target by 2025.
Change three: the demand for construction steel peaked
In 2014, China's steel (including repeated materials) output of 1.125 billion tons, of which rebar output of 215 million tons, wire rod 153 million tons, a total of 368 million tons, accounting for about 32.7% of the total steel, if you add small and medium-sized profiles and bars in the construction of carbon steel, then the total amount of construction steel reached nearly 500 million tons, accounting for about 45% of the total. Moreover, the above construction steel is hot-rolled primary material. At present, China's steel overcapacity is more than 200 million tons, and construction steel is the main part of it. The main consumption area of construction steel is urbanization construction, and the demand for construction steel is mainly constrained by the regional urbanization rate. At present, the demand for construction steel in East China and Northeast China has begun to shrink.
In 2014, there were 154 rebar and wire rod production lines in East China, with an annual production capacity of 95.14 million tons and 34.44 million tons of rebar and wire rod respectively, and 41 rebar and wire rod production lines in Northeast China, and an annual production capacity of 17.38 million tons and 12.52 million tons of rebar and wire rod respectively. Among them, there are 13 wire rod and rebar production lines in Liaoning Province, with an annual production capacity of 9.16 million tons and 9.98 million tons respectively, and the production capacity of construction steel accounts for about 64% of the total production capacity of building materials in the northeast region. In 2014, Liaoning's urbanization rate was 67.5%, ranking second in the country, and it is expected to reach 75% by 2020. The high urbanization rate means that the development and construction speed of commercial housing has decreased relatively, and the ability to consume construction steel has weakened. The urbanization rate of the six provinces in East China is similar to that of Liaoning.
In contrast, the western region is vast, the infrastructure is relatively weak, and the self-sufficiency of construction steel production is relatively weak, of which in 2014, Shaanxi, Ningxia, Gansu and Xinjiang had a total of 21 construction steel production lines, with a total annual production capacity of 14.75 million tons, of which the annual output of rebar is 11.25 million tons and wire rod is 3.5 million tons. The demand for construction steel in East China and Northeast China has shrunk or HRB400 rebar as the main object, replaced by HRB500, HRB600 and other higher-grade construction steel. Steel enterprises in the western region will make full use of their location advantages, continuously improve the supply capacity of construction steel, and implement all-round containment of construction steel products such as price, channel, marketing and market for steel enterprises outside the region.
Change 4: Concentrate on "double excellence"
Generally, according to the classification of production capacity, China's steel enterprises can be divided into extra-large (annual output of crude steel more than 30 million tons), large (annual output of crude steel 10 million tons ~ 30 million tons), large and medium-sized (annual output of crude steel 5 million tons ~ 10 million tons), medium (annual output of crude steel 1 million tons ~ 5 million tons), small (annual output of crude steel 1 million tons and below, excluding special steel enterprises). After years of continuous high-speed economic development, overcapacity in the industry and low steel prices, the transformation and upgrading of the steel industry will make significant progress. Starting from the "Thirteenth Five-Year Plan", at the latest around 2017, the steel industry will undergo major qualitative changes, and a number of "high-quality products" and "excellent enterprises" in the true sense will be born.
The second is the per capita crude steel stock. It is now generally believed that when the per capita annual consumption of crude steel reaches 600 kg, it can reach the world level, and in 2014, China has reached this level, but from the per capita crude steel stock, the per capita stock of the United States when it completes industrialization is 8.8 tons, the United Kingdom is 7.6 tons, Japan is 10.5 tons, and South Korea is 9.5 tons. In general, to complete industrialization in a country, the per capita steel stock needs to reach 8 tons ~ 10 tons. According to this view, China's per capita crude steel stock in 2015 was 6.48 tons, or 7.04 tons in 2016, and in 2017 it can approach the world level of an average of 8 tons.
The author believes that the so-called "high-quality products", that is, the equipment manufacturing industry as the main line of demand of hot and cold rolled plate, rod and wire, high-end construction steel, pipe and special steel and other products as the leading system, the quality, performance, stability and consistent performance of its products reach or lead the world's advanced level, with strong international high-end manufacturing market competitiveness and profit space, can meet the needs of both domestic and international markets at the same time. The criteria for "excellent enterprises" mainly include four aspects: first, the annual per capita output of crude steel of 1,000 tons and above, second, economic and technical indicators into the world's advanced level ranks third, independent innovation ability is strong, there are research institutes and enterprise invention patents, fourth, from manufacturers to service providers, with e-commerce as the core to establish customer quality service network.
In this context, the development trend of the steel industry will change qualitatively, including strengths, weaknesses and disadvantages3