Steel industry stimulus plan facilitating sector rejuvenation

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Mar 2009

On Junuary 14, executive meeting of the State Council deliberated and passed in principle the adjustment and revitalization plan of the iron and steel industry, which pointed out the direction for iron and steel enterprises in overcoming difficulties and realizing scientific development. Deputies from iron and steel industry expressed successively that as long as we drive relative work firm and steadfast, the iron and steel industry will surely realize the great-leap-forward development.
Look towards the future and drive the adjustment of industrial layout
"I'm fully confident in the future development of the iron and steel industry. Such factors as the launch of the adjustment and revitalization plan, the infrastructure strengthening by the government and the guarantee housing construction, have shown their revitalization function to the iron and steel industry." Zhu Jimin, Deputy of the National People's Congress and Board Chairman of Shougang Group told the correspondent.
Some reasons explained the confidence of Deputy Zhu Jimin: Firstly, the fundamental situation of China's economic development doesn't change. China's urbanization process cannot go on without the material industry, so the iron and steel industry has a huge development space.
Secondly, China's iron and steel industry is strengthening increasingly, and in some fields it takes the lead in the world. The amount and kinds of China's iron and steel industry have gained much progress. In the construction of Shougang Jingtang Steel Plant, 91 percent of facilities are domestically made, and two thirds of the newly-adopted 220 techniques are integrated and developed domestically.
Moreover, the layout of China's iron and steel industry tends to be reasonable. Some major steel companies moves from the hinterland to coastal cities, and we can surely realize the industrial upgrade with current technologies, follow the way of recycling economy, and solve the problem of future development road with the industrial layout adjustment.
Be close to the market and adjust and optimize the product structure
Deng Qilin, Deputy of the National People's Congress and General Manager of Wuhan Iron & Steel (Group) Corp. (WISCO) told the correspondent that the sales prices of WISCO products in March had been released, and prices of most plate products are raised. The price of silicon steel products has increased most, which is raised by RMB1000 yuan per ton. "It is in accordance with the continuous rebound of steel plate prices on the market recently. It shows that with the gradual implementation of relative policies, the confidence in the market is being regained."
In dealing with the global financial crisis, WISCO actively adjusts its product structure and produces beneficial products such as silicon steel, sedan plate, heavy rail, pipeline steel; WuKun Steel Co., Ltd., Liuzhou Iron & Steel (Group) Co., Ltd., and Wuhan Iron & Steel Group Echeng Iron & Steel Co., Ltd. also optimize their product structure, decrease inventory, improve quality and actively promote products.
Deputy Deng Qilin believed that only when steel enterprises insist independent innovation and quality improvement with technology as the lead could they grow larger and stronger. At present, WISCO is vigorously developing core technology and matching technologies with independent intellectual proprietary rights, carrying out the strategy of "competitive famous brands". Batches of competitive brands have taken shape, and "Dual high" products (products with high technological contents and high added value) have accounted for over 80 percent. Not long ago, "Independent innovation and industrialization of WISCO-oriented silicon steel manufacturing technology" has been awarded the first prize of the National Science and Technology Progress Prize. "Driven by the policy of continuous increase, domestic demand stimulation, and structural adjustment, several large infrastructure construction projects are initiated. The iron and steel industry is taking a turn for the better." Dong Caiping, Deputy of the National People's Congress and Board Chairman of Zenith Iron & Steel Group stated. He added that the group is now keeping in full production with a monthly steel output of over 450 thousand tons.
Deputy Dong Caiping said that Zenith will continue accelerating the product structural adjustment. "We should correctly judge the market trend and demands, adjust the product structure, and change our leading products from fine steel to construction steel. We make effort to produce more than 5.5 million tons steel by the end of 2009, and make the total sales income of the group breach RMB35 billion yuan."
Union and recombination brings great developing opportunities
The adjustment and revitalization plan of the iron and steel industry put forward that in order to speed up the adjustment and revitalization plan of the iron and steel industry, we must focus on volume control, laggard productivity elimination, union and reorganization, technological alternation, and layout optimization, thus drive the transformation of iron and steel industry from scale to strength.
For this, Zhao Xia, Deputy of the National People's Congress, Deputy General Manager of Baosteel, and Board Chairman of Baosteel Group Xinjiang Bayi Iron & Steel Co., Ltd. has deep feeling, "The industrial adjustment and revitalization plan influences the industry greatly and is an obvious guidance. It plays an active role in helping iron and steel companies ride out the current crisis, change developing mode, and grow larger and stronger."
Deputy Zhao Xia believed that the fundamental cause of the steel industry's crisis is the unreasonable internal structure and weak corporate competitiveness. Problems like low market concentration degree, weak comprehensive competitiveness of enterprises, drastically increased environment resource pressure are the major factors restricting the development of the steel industry presently.
The adjustment and revitalization plan of the iron and steel industry put forward clearly that the driving function of large groups should be exerted, so as to boost the corporate union and reorganization, cultivate large and extra large steel group with international competitiveness, optimize the industrial layout, and enhance the industrial concentration. Deputy Zhao Xia thought that it brings significant opportunity for the development of large iron and steel enterprises with technology and strengthen including Baosteel.
On March 1, Baosteel Group and Hanggang Group signed an agreement on the reorganization of Ningbo Iron & Steel Co., Ltd., and Baosteel got 56.15 percent of share holding of Ningbo Iron & Steel. Deputy Zhao Xia believed that on the one hand, the reorganization of Ningbo Iron & Steel can improve the concentration degree of the industry, and shake off laggard productivity through technological alternation, and enhance the producing capacity of Ningbo Iron & Steel; on the other hand, through the reorganization of Ningbo Iron & Steel, Baosteel will possess a natural advantage of deepwater coastline, which offers new developing opportunities for the group.
"At present, it's a favorable time for the iron and steel industry to speed up the structural adjustment, enhance concentration degree, and make effort to improve their core competitiveness." Deputy Zhao Xia suggested that we should implement relative matching policies as soon as possible, put each policy into practice via strict regulation system, ensure the healthy and orderly development of the industry, and lay a solid foundation for the construction of the strong nation of iron and steel.

Source: CE.cn