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Whether under the pressure of economic efficiency, or before the tight constraints of environmental protection, the steel industry has reached the critical juncture of transformation and upgrading. In 2014, the whole industry will forge ahead on the long road of transformation and upgrading. Since the beginning of 2014, with the continuous promotion of structural adjustment and economic growth slowing down, steel demand growth is weak, the steel market is still oversupplied, steel prices "fall endlessly". In contrast, in 2013, the economic benefit of the steel industry was slightly better than that of 2012, and the overall situation of excess production capacity, low steel price and poor efficiency remained unchanged.




In the steel industry overcapacity, structural excess problem appears very prominent, in which low-end products overcapacity, and high technology content, high value-added product field market competitiveness is insufficient. Luo Baihui, a specially invited researcher at the China International Economic Development Research Center, said: "In the face of fierce competition for low-end products, low added value of products and the need to import some high-end products, we still need to adjust the structural problems of the industry and let the industry return to orderly production and healthy competition."




In fact, in terms of transformation, upgrading and structural adjustment, the most effective and fruitful is product upgrading. Luo Baihui thinks, the upgrade of iron and steel products is divided into two major aspects. First of all, in the aspect of high strength reinforcement used in construction with a wide range of quantity, 400MPa class and superior high strength reinforcement should be used to completely eliminate the ordinary reinforcement of 335MPa class. "If we use 1335mpa steel bars a year, we will consume 10 million tons more steel, 16 million tons more iron ore and 8 million tons more coal. Such high pollution and low efficiency are not conducive to energy conservation and emission reduction in the whole society. From the perspective of industry profitability, although the sales volume of 400MPa grade high-strength reinforcement bars does not increase much than that of 335MPa grade ordinary reinforcement bars per ton, due to the large quantity, product upgrading can be translated into profitability." Luo further said that the improvement of the quality and quality of steel products will support the transformation and upgrading of the downstream industry, while reducing the pressure on environmental resources and improving the competitiveness of the manufacturing industry.




Secondly, some progress has been made in the development of high-end steel market. At present, the third-generation automotive HIGH-strength steel developed and produced by Baosteel can play a key role in the reduction manufacturing of the downstream automobile industry. The varieties and output of high-grade oriented silicon steel used in the manufacturing industry are further expanded, and its core patented technology has been formed, which basically meets the needs of the downstream national power equipment manufacturing industry. The X80 grade super-thickness pipeline steel produced by Shougang has been localized to meet the needs of natural gas pipeline transportation.




In addition, breakthroughs have been made in the development of some special steels, such as low nickel ferritic stainless steel plates and strips, and significant progress has been made in the production technology of key boiler tubes for ultra-supercritical thermal power units. In the current reality of backward production capacity, needs a process case, improve product grade and added value, no matter for the steel industry's own transformation and upgrading, and better meet the needs of the downstream industry transformation, will play a key role, and product upgrading is an important part of the profits to improve the steel industry.




What needs to be paid attention to is that, on the way to upgrade files, must not rush in. Li Xinchuang, deputy secretary general of the China Iron and Steel Association, said that companies in the industry need to continue to improve their self-discipline and should not invest in production in clusters. "In the past, there was a rush to invest in low-end steel, but now there is a trend to extend to high-end steel," he said.




Liu Jie, a steel industry analyst with the Institute, said the country had made some progress in producing high-grade steel, but the focus on high-end projects was also likely to lead to overcapacity. "Take medium thick plate as an example, in recent years, large steel enterprises on a number of capacity, but due to the limited market demand for this product, strong specificity, resulting in excess capacity. Therefore, the connotation of transformation and upgrading is not limited to high value-added products. After all, the mass and wide range of low-end products account for half of the market. Therefore, it is still necessary to take the market as the orientation and differentiate between high and low-end products."




In general, the danger of local overcapacity needs to be warned, but increasing the variety of products with high added value and high technology content is still the main direction of future upgrading. In order to achieve these, we must enhance the ability of independent innovation and the application and development of advanced technology. The problem in China's iron and steel industry is that although the hardware equipment is advanced, the technology level is low, and good equipment does not produce good products. For example, China has built a large number of modern sheet production facilities, such as hot rolling, cold rolling, galvanized wire, etc., but the level and grade of advanced high-strength steel for automobile production is still far behind that of foreign countries. After all, transformation and upgrading are not about forging ahead with environment, resources and equipment. Ultimately, it is about forging ahead with technology and innovation.




Talk about innovation upgrades, some steel mills are on the business model to explore the service function, pay attention to and the industrial chain to connect with users, such as in baosteel and manufacturers to jointly develop advanced automotive Gao Qiangban, as a result, steel mills to service-oriented manufacturing development, gradually from the simple product manufacturers to service providers, realize own value of ascension.




In addition, some specialized division of labor in the front of the industry, e-commerce and logistics are also opportunities to deepen the transformation. Chen Ziqi introduced that Baosteel, Ansteel and Hesteel Group have built several steel processing and distribution centers, transforming the original simple sales mode of steel traders into a close connection with the society and promoting the deep integration with users.




"In the era of high profits in the past, enterprises paid little attention to these issues, but faced with the current predicament, enterprises need to re-examine the past extensive development mode from the perspective of survival. The real transformation and upgrading can only be achieved gradually through these dribs and drabs of technological innovation and business model improvement."


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