Photo taken on Aug. 17, 2022 shows a stainless steel production workshop of Tsingtuo Group in Fu'an County of Ningde, southeast China's Fujian Province. (Xinhua/Wei Peiquan)
BEIJING, Aug. 17 (Xinhua) -- China's steel industry witnessed continuous growths in output of crude steel and rolled steel in the first half of 2023 with steel exports posting a big increase of 31. 3 percent year on year on improved international competitiveness. This has helped China's steel industry maintain a stable growth during the period despite of declined profitability of steel companies, showing great resilience of the industry.
In the face of a more challenging market environment, China's steel industry has achieved overall stable production, enhance core competitiveness, and promote breakthroughs in high-end, green and intelligent development, said Tan Chengxu, Chairman of the China Iron and Steel Association(CISA).
-- Surging exports of steel products
This year, China's steel exports have shown a strong momentum. In the first half of the year, China saw rolled steel exports reach 43.58 million tonnes, a year-on-year increase of 31.3 percent and net crude steel exports amounted to 421.1 million tonnes, surging 64.3 percent year on year, according to CISA.
"China's iron and steel industry has further improved its international competitiveness with significant growth in high value-added product exports. The proportion of steel plate exports has reached 66 percent of the total, marking a record high," said Jiang Wei, vice chairman of CISA.
Baowu Group Masteel Rail Transit Materials Technology Co., Ltd. (MRT), a national demonstration manufacturing enterprise leading in steel axle production, has a global market share of over 10 percent in its steel axle products.
In the first half of the year, MRT achieved a revenue growth of 14.4 percent compared to the same period last year, surpassing the annual target progress by 110.5 percent. At the same time, the company's export sales increased by 34.9 percent year on year.
Tiangong International Company Limited (Tiangong International), a high-tech steel production enterprise, continues to enhance the high-end and high value-added advantages of its products, with exports accounting for nearly half of its sales.
"In June of this year, the company's export sales exceeded 40 million U.S. dollars, once again breaking monthly export performance records," said Wu Suojun, General Manager of Tiangong International.
Recently, their 7,000-tonne rapid forging project officially started production, marking an important milestone in Tiangong International's entry into the integrated large-scale die casting field.
It is worth noting that overall steel exports have shown a trend of increasing quantity but decreasing prices.
In the first half of the year, the average price of steel exports reached 1,075 U.S. dollars per tonne, a decrease of 24.7 percent year on year. Officials from the China Iron and Steel Association expected that the growth rate of steel exports in the second half of this year will narrow.
-- Ensuring stable production
China is the world's largest producer and consumer of steel, with steel production primarily meeting domestic demand.
In the first half of this year, due to steel supply exceeding demand, the decrease in steel prices was greater than the decrease in costs, resulting in a significant decline in overall profitability for the steel industry.
In the first six months this year, the operating income of key member steel companies reached 3.19 trillion yuan, a year-on-year decrease of 5.56 percent. Operating costs decreased by 3.06 percent compared to the previous year, but the decrease in revenue exceeded the decrease in costs by 2.5 percentage points, according to data from the China Iron and Steel Association.
In addition, total profits amounted to 33 billion yuan during the same period, a year-on-year decline of 68.8 percent. The average sales profit margin was 1.03 percent, a decrease of 2.1 percentage points compared to the previous year. The proportion of companies with losses reached 44.6 percent, an increase of 17.4 percentage points compared to the same period last year, the data showed.
Faced with the current supply-demand imbalance in the market, leading steel enterprises have ensured stable production and actively promoted management reforms and bench-marking activities.
Companies such as Shagang Group and Shandong Iron and Steel Group have employed various measures to reduce costs, improve efficiency, and continuously advance performance indicators.
While ensuring the normal production of existing mines, efforts should be accelerated to promote the construction for new projects, said Huo Fupeng, deputy director of Department of Industry of the National Development and Reform Commission (NDRC).
-- Accelerating low-carbon development
As China's economy transitions from rapid growth to high-quality development, reducing the volume and improving the quality of steel production has become a trend in the iron and steel industry.
In terms of consumption structure alone, the usage of steel in the construction industry decreased from 58 percent in 2020 to 53 percent in 2022, while the usage in the manufacturing industry increased from 42 percent to 47 percent.
The continuous growth in steel demand from sectors such as automobiles, household appliances, ships, wind power, and photovoltaics effectively supported the growth of steel varieties and quantities in the manufacturing industry.
This year, Shougang Group has completed the construction and production of the world's first 100 percent thin-specification high-magnetic-oriented electrical steel production line, with two oriented electrical steel products achieving a global debut.
With strong market competitiveness, Shougang's output and sales of electrical steel in the first half of the year reached 54.4 percent and 52.2 percent of the annual target respectively, with a year-on-year increase of 14 percent, 59 percent, and 39 percent in non-oriented high-grade, new energy, and oriented electrical steel products.
In the first half of the year, Ansteel achieved the world's first roll-out of 33 millimeter thick X80-grade high-strain pipeline steel plates, Xinsteel successfully rolled the world's thinnest high-grade non-oriented electrical steel, and Shagang launched ultra-large welding heat input high-end shipbuilding plate steel products.
Green and low-carbon development is an inherent requirement for the high-quality development of the iron and steel industry. Energy consumption and pollutant emissions per ton of steel in the steel industry continue to decrease.
By the end of June, a total of 87 steel companies had completed ultra-low emissions transformation and assessment monitoring, with 62 companies completing ultra-low emissions transformation for the entire production process, involving crude steel capacity of approximately 314 million tonnes, and 25 companies completed ultra-low emissions transformation in some processes, involving crude steel capacity of approximately 114 million tonnes.
On May 17th this year, the European Union Carbon Border Adjustment Mechanism (CBAM), also known as carbon tariffs, officially came into effect, marking the implementation phase of the international carbon pricing mechanism.
Under such mechanism, Chinese steel products will need to bear higher export costs to Europe. Other developed countries may also set up similar trade barriers, resulting in a broader impact on China's steel industry. Furthermore, downstream industries such as automobiles have started to focus on the carbon emissions of steel products, posing significant challenges for automotive steel producers.
It is understood that HBIS Group has built the world's first 1.2 million-tonne hydrogen metallurgical demonstration project, reducing carbon emissions from the source and paving a new path for the production of low-carbon materials required by the automotive industry.
"Downstream customers not only focus on product quality when choosing steel products but also pay attention to the green and low-carbon production process," said an official from HBIS. The CBAM has brought opportunities for the market expansion of HBIS' green and low-carbon products in Europe, as well as in the global market.
(Edited by Tian Shenyoujia with Xinhua Silk Road, tianshenyoga0524@163.com)
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