China's steel industry is growing strongly and not worrying

The iron and steel industry is the most important basic raw material industry in the national economy and an important supporting force for China's economy. With the rapid development of the national economy, China's steel industry has developed rapidly and its scale has been continuously expanded, and great achievements have been made. However, there are still many problems in the development of China's steel industry. For example, iron ore resources are highly dependent on foreign countries. Iron and steel enterprises are everywhere, and repeated construction is serious. The scale of most products is low, the development of dominant enterprises is lagging behind, the concentration of major steel products is continuously decreasing, and capacity is expanding. There is no simultaneous improvement in scale effect. Therefore, it is an urgent task for China's steel industry to eliminate backward technological equipment and production capacity as soon as possible, enhance the competitiveness of core enterprises, and avoid blind expansion of production capacity and scale.

China's steel industry is developing rapidly
In recent years, China's steel production has expanded rapidly, and the total volume has continued to expand. The status of the steel industry in China's national economy has continued to increase. In 2009, the production of crude steel, steel, pig iron, iron ore and ferroalloys above designated size were 56784, 69244, 54375, 88017 and 22.09 million tons respectively. From 2002 to 2009, the annual growth rate of China's steel and steel products exceeded 20%. Crude steel and pig iron production accounted for 46.7% and 60.5% of the world respectively. China is currently only a major steel producer and is far from being a steel power.

The production areas are relatively concentrated. Hebei, Jiangsu, Liaoning and Shandong have concentrated on the country's major steel production capacity.

The large number of enterprises is one of the important characteristics of China's steel industry. At the end of July 2010, there were 511, 639, 3214 and 1377 crude steel, pig iron, steel and ferroalloy producers.

Although the average production scale of iron and steel enterprises has been continuously improved, the average scale is still generally low. In 2009, the average production scale of pig iron, crude steel, steel and ferroalloy enterprises was 76.7, 111.3, 22.4 and 16,000 tons respectively.

There are still some problems in the steel industry
The dependence of iron ore resources on foreign countries is as high as 74.5%, which seriously threatens the healthy development of the steel industry. Iron ore is the most important basic raw material for the steel industry. With the growth of demand for steel products in the national economy, the scale of iron ore production in China is expanding, but the growth rate of pig iron, crude steel and steel is faster than that of iron ore. With the growth rate, China's iron ore gap is getting bigger and bigger, and its dependence on the international market is constantly increasing. Since 2003, the number of imported iron ore in China has surpassed that of Japan for the first time. China has been the world's largest importer of iron ore for six consecutive years.

From the perspective of China's iron ore dependence on imports, it can be divided into three stages. Before 1991, the dependence was less than 20%, which was low dependence; in 1992-2003, the dependence was between 20% and 50%. Between, it is moderately dependent; after 2004, the dependence is more than 50%, and it enters a highly dependent period. In 2009, China imported 383 million tons of iron ore, and the dependence of the steel industry on imported ore was as high as 74.5%. If the current growth rate is maintained, the steel industry's reliance on the international iron ore market will further increase.

Although China's iron ore imports account for a large proportion of the global iron ore trade, due to the excessive number of enterprises, it is difficult to unify the position in the international iron ore price negotiations. China has not only failed to obtain the pricing power of imported iron ore. Instead, they were forced to accept the price coercion of the international iron ore monopoly giant.

Iron and steel enterprises are everywhere, and repeated construction is serious. After years of development, the total volume of China's steel industry has continued to expand, the number of steel companies has increased in various places, and some regions have reached hundreds of enterprises.

The proportion of large enterprises has increased, and small steel still accounts for a considerable share. The decline in scale effect still restricts the development of China's steel industry.

The provinces with large steel production ranks as small provinces with an average size, and the scale of enterprises in different regions varies greatly. The average size of enterprises in the steel industry varies greatly from region to region. Although the total amount is higher in Hebei and other regions, the average size is relatively small due to the large number of enterprises.

The development of advantageous enterprises lags behind, and SMEs are the new force in the expansion of the steel industry. Whether it is crude steel, pig iron or steel, the expansion speed of superior enterprises is significantly lower than the total expansion rate. This indicates that China's steel industry is mainly driven by the expansion of small and medium-sized steel enterprises, and the leading role of large steel enterprises has not been well played.

The concentration of major steel products continues to decline. From January to July 2010, the first four concentration rates of crude steel, steel, pig iron and ferroalloy were 11.2%, 8.7%, 10.7% and 8.4% respectively; the first eight concentration rates were 19.1%, 14.7% and 19.4% respectively. And 12.5%. The low intensification reduces the competitiveness of iron and steel enterprises in economies of scale and technology research and development in international competition. It is difficult to unanimously import and export, and loses the right to price discourse, which seriously damages the interests of China's steel industry.

There are three main reasons for the low concentration of China's steel industry: too many enterprises are the basic reason for low concentration. Due to the rapid advancement of urbanization in China and the rapid development of heavy chemical industry, the demand for steel products is high, and the profits of the steel industry are rising, resulting in a large increase in small steel mills. China's steel industry is in an extremely fragmented mode of production, and most of the world's major steel producers are extremely high oligopoly. If this trend continues, the use of resources will become a serious injury to the Chinese steel industry. The regulations on market access need to be improved, and the implementation of laws and regulations is weak, which is the policy reason leading to disorderly competition in the market. Due to the one-sided emphasis on economic development, the localities are fighting each other, lacking the overall scientific planning and rational layout of sustainable development. The resource optimization configuration mechanism has not been established, which is the market cause of blind investment. There is no establishment of an environmental tracking mechanism, an investment failure responsible mechanism, no taxation and the level of consumption of environmental resources, while various capitals compete to chase short-term, local interests, ignore the interests of the whole, society, and the overall situation, and ultimately lead to the loss of multi-party interests.

Accelerate the healthy development of China's steel industry
After years of development, the iron and steel industry has created many world firsts. However, from the perspective of the carrying capacity of resources and the environment, the iron and steel industry will continue to take the road of scale expansion and development, which will surely become a hidden danger in the future development of China's social economy. The steel industry must develop in the direction of moderate scale expansion, balanced development speed, and coordinated regional distribution. Relying on the sustainable carrying capacity of resources, with the aim of structural optimization, reasonable layout, improvement of specialization level, steady improvement of concentration, simultaneous improvement of economic benefits and environmental benefits, sustainable and limited development will be achieved, and consumption will be reduced. Progress has been made in reducing reliance on international markets.

Nearly half of the world's steel production capacity is distributed in China. This proportion should not continue to expand. Otherwise, in the future, when the demand for steel products will decrease and the economic cycle of declining economy will come, it will cause the risks of China's finance, investment, credit and resources to expand. Lead to economic turmoil.

Restrict the export of primary steel products and encourage the export of deep processed products. Steel is a high-energy, high-water-consumption product. In recent years, China has changed from a steel importing country to a net exporter. The essence behind the export of a large number of primary steel products is that we have paid a heavy environmental cost for the iron ore purchased at a high price and subsidized the exporting country. Restricting and reducing the export of primary steel products can reduce the output of steel products, thereby reducing dependence on imported iron ore; promoting the upgrading and optimization of industrial structure; reducing energy and resource consumption, protecting water resources, and protecting the environment. Through the export of deep-processed finished products, the steel production capacity is digested and utilized at a high level.

Scientifically formulate policies for product structure adjustment and reduce the dependence of iron ore import. Different steel products have different starting points for different structures and scale adjustments. For pig iron, crude steel and steel, the production capacity of production scale enterprises of 600,000 tons, 1 million tons and 150,000 tons should be adjusted separately.

The elimination of the production capacity of small steel enterprises of about 10% will boost the concentration of China's steel industry by 1-2 percentage points. If the production capacity and output are no longer increased, the demand for international iron ore will be reduced by about 20%. The reduction in demand for iron ore will lead to a certain excess of foreign iron ore production, which will inevitably bring about a decline in prices, thereby improving the profitability and living environment of China's steel industry.

Breaking down regional divisions and local protection, and accelerating the process of cross-regional industrial restructuring. The state should coordinate and coordinate the development of the steel industry in various regions, complement each other, make trade-offs, and strive to avoid and reduce the further deterioration and spread of the phenomenon of redundant construction. Establish a corporate elimination mechanism, accelerate the pace of enterprise restructuring between different regions, break the regional division, in line with the principle of voluntary enterprise and complementary advantages, take the leading enterprises as the core, integrate the steel capacity of each region, establish a cross-regional steel industry cluster, and promote steel Industrial health and orderly development.

Stock adjustment is the main theme of revitalizing the steel industry. As China's steel industry still has a large number of small-scale production enterprises with low efficiency, high pollution and high energy consumption. At this stage, to adjust the overproduction of the steel industry, we should base ourselves on stocks to avoid and reduce the increment. From the perspective of supply and demand of steel products, the revitalization of the steel industry requires efforts in structural adjustment and restructuring, mergers and elimination of backward production capacity, and the adjustment of stocks as the starting point and main theme of structural adjustment of steel industry products.
 

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