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The Importance Of The Steel Industry Chain


Beijing, August 17 (reporter Du Yanfei) since this year, China’s iron and steel industry has resolutely reduced crude steel production and strictly adhered to the bottom line of no new production capacity. Meanwhile, the national development and Reform Commission and the Ministry of industry and information technology are organizing a nationwide “look back” inspection of steel production capacity and reduction of crude steel production.

The relevant person in charge of the planning and Development Department of China Iron and Steel Association said that the “looking back” and reduction of iron and steel production capacity is a strategic decision made by the state after overall balance, which is conducive to maintaining the balance between resource supply and demand. A good balance is conducive to reducing the price of iron ore; If the balance is not good, it may be counterproductive. The key is to “play a game of chess” in the whole industry to avoid a sharp rise in steel prices.

“At present, the active production reduction when the market is at a high level is different from the passive production reduction when the whole industry lost money in 2015. Based on the demand situation of downstream industries in the second half of the year, and considering that the steel demand was low before and high after last year, the steel demand may decline in the second half of this year. Reducing output is also the initiative of the whole industry to adapt to the changes in market demand. ” The person in charge said that it is recommended that iron and steel enterprises reasonably arrange and adjust equipment utilization and maintenance according to the requirements of production reduction, and focus on limiting iron output to achieve the purpose of steel restriction; At the same time, timely release the production reduction information to the society, guide the iron ore market expectation and maintain the stability of market supply and demand; Increase the proportion of direct selling, prevent speculation and avoid sharp price fluctuations; We will further control the export of steel products, no longer export general products, and only maintain the export of a small number of high-tech and high value-added products.

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According to Wang Guoqing, director of Lange Iron and Steel Research Center, CISA clearly needs to resolutely implement the relevant work requirements of “looking back at capacity and reducing crude steel output”. Under the promotion of the principle of “two limits, two unlimited and three possibilities” of production restriction launched by the Ministry of ecological environment, it is possible to increase the scope of production restriction in key steel producing provinces and cities in the future, and the relationship between supply and demand in the steel market will tend to improve.

At the same time, in order to ensure domestic supply, China has issued the policies of adjusting import and export tariffs of steel products and canceling export tax rebates twice this year, and the steel export order index has fallen continuously.

“With the effect of the implementation of the export policy, steel exports will fall significantly, which will help export resources return to China and ensure the supply of domestic steel market. At the same time, it will also help the implementation of carbon peak and carbon neutralization goals and the decline of iron ore demand, so as to drive the rational return of iron ore prices.” Wang Guoqing said.

The recent (enlarged) meeting of the Standing Committee of the Party committee of CISA also clearly pointed out that while implementing the task of reducing crude steel output, the iron and steel industry should closely track the changes in downstream steel demand, steel import, and export, steel products, and raw material prices and inventories, timely adjust and improve response measures, and resolutely curb the irrational rise in the prices of main raw materials, We will resolutely maintain normal market order and the stability and safety of the industrial chain.