■ our reporter he Xiaoxi
“We should attach great importance to it, reassess the value of China’s iron resources and expand the development and utilization as soon as possible. First, we should expand China’s iron ore supply as soon as possible; second, we should promote the healthy and orderly development of the scrap industry and strive to increase China’s scrap resource output to about 330 million tons by 2025.” On the morning of December 28, 2021, Luo Tiejun, member of the Standing Committee of the Party committee and vice president of China Iron and Steel Industry Association, stressed in his speech at the 2021 national scrap steel conference and the second expanded meeting of the Seventh Council of China scrap steel Application Association.
Luo Tiejun introduced that from January to November, the national crude steel output was 950 million tons, an increase of about 60 million tons in the first half of the year. In the second half of the year, the output began to reduce and expand month by month. The output in the first 11 months decreased by 2.6% year-on-year, and the annual output is expected to drop to about 1.03 billion tons. The reduction of iron and steel production, the gradual increase of China’s waste iron and steel resources and the continuous improvement of scrap consumption ratio have effectively promoted the rational return of imported iron ore prices.
Looking to the future, Luo Tiejun pointed out that the iron and steel industry will face severe challenges brought by limited demand growth and potential expansion of supply, as well as dual constraints on resources and environment. The development of iron and steel is determined by demand, and the core and key is to adapt to demand. Under the precise regulation and control of national macro policies and industrial policies, the overall supply and demand of iron and steel has tended to match and gradually balance since this year. It is expected that with the gradual implementation of various national economic policies, China’s economy will gradually stabilize and recover. Therefore, we expect that the annual demand for steel in 2022 will be basically equal to the level of this year, and the steel output will also match the demand. Among them, the real estate industry is facing downward pressure due to policy factors such as “no speculation in housing” and “three red lines”. Infrastructure investment and construction is expected to rebound rapidly, and the manufacturing industry is generally showing a recovery trend, but the downward export may drag down the indirect export of steel.
Luo Tiejun specially pointed out that although the total demand is expected to remain stable next year, the steel industry is currently facing great pressure of “demand contraction and expected weakening”. After the sharp decline in demand, it is expected to be difficult to recover quickly in the short term. Recently, the steel production capacity has a trend of accelerating the release, the supply-demand balance is facing severe challenges, and may exist for a long time. Therefore, it is very important to establish an effective market-oriented industry self-discipline mechanism, effectively maintain the market order and promote the maintenance of the balance between supply and demand. The “double control” policy of steel production capacity and output implemented since this year has played a positive role in balancing steel supply and demand, stabilizing steel prices, curbing the excessive and rapid rise of imported iron ore prices, and improving the operating efficiency of enterprises. However, the direct restriction on steel output is, after all, a short-term correction measure for market dislocation. In the medium and long term, in order to maintain the dynamic balance between steel supply and demand, it is necessary to study and establish a long-term and market-oriented coordination mechanism, with the goal of “effectively strengthening industry governance and effectively maintaining market order”, so as to form both energy consumption and carbon emission policy constraints and industry self-discipline Government supervision is an effective new mechanism in line with market laws and market requirements.
For promoting the further cultivation, growth and healthy development of scrap and EAF steel industry, Luo Tiejun put forward two suggestions: first, we should solve the scrap tax problem as soon as possible and straighten out the upstream and downstream; Study the preferential value-added tax policies for imported recycled steel raw materials. Second, guide the transformation of long process and develop short process to create conditions for the development of EAF steel; At the same time, we should correctly evaluate China’s scrap output and moderately and orderly develop electric furnace steel.
(International Business Daily)
