steel industry develop trends

Ten Trends In The Steel Industry

As one of the pillars of the national economy, the iron and steel industry has attracted much attention. In recent years, the steel industry has ushered in a series of important changes and opportunities, both in terms of market performance and domestic industrial policy direction.

1. Strong export performance

The latest data from the General Administration of Customs shows that in August 2024, China exported 9.495 million tonnes of steel, an increase of 14.7% year-on-year; from January to August, China exported 70.575 million tonnes of steel, an increase of 20.6% year-on-year. This data not only shows the strong demand for steel products in the international market, but also reflects that the export competitiveness of domestic steel enterprises has improved.

Among them, GloryRail, as a Chinese steel rail exporter, exports to countries covering Peru, Columbia, Chile, Ecuador, Bolivia, Australia, Philippines, Singapore, Malaysia, Indonesia, Kenya, Saudi Arabia, Vietnam, Russia, Ukraine, etc. By working in partnership with our customers from different countries, we can ensure that our products could fulfill the demands of the international railway industry. And we supply different standards to satisfy customers from different countries.

2. Overseas plant white-hot

With the deep development of globalisation, China’s steel enterprises have gone abroad and invested in overseas plants.

On 9 September, Sinosteel Equipment and Xinfeng Iron & Steel (Egypt) Co., Ltd. formally signed a contract for the general contracting project of 2 million tonnes of hot rolled coils in Egypt, which is a greenfield project invested and constructed by Xinfeng (Group) in the Suhana Industrial Park in the Suez Canal Economic Zone of Egypt, and which is designed to have an annual production capacity of 2.04 million tonnes of crude steel and 2 million tonnes of steel.

According to recent media reports, with a total investment of about 60 million US dollars, covering an area of about 50,000 square metres Aimée Longteng Wear-resistant Materials (Zambia) Co. The company is the first overseas factory invested by Longteng Special Steel in Zambia, Africa, with an annual output value of up to US$132 million and an annual tax contribution of up to US$20 million after the second phase goes into operation.

Panva Group’s 10 million tonne steel project in the Philippines, the first phase of which is under hot construction! Ltd. is a wholly-owned subsidiary of the Panva Group’s Chongqing Panva Plate Co. The company plans to invest up to 3.5 billion US dollars in the project, which will be built in three phases and will have an annual production capacity of 10 million tonnes of steel.

Recently, the contract of EP project of new blast furnace hot blast furnace on Big K Island of Indonesia was signed, the project is located in Qingshan Industrial Park of Indonesia, which is a joint venture between Guangxi Guixin Iron & Steel Group and Qingshan Group, and is scheduled to be completed and put into operation in August 2025.

The implementation of these projects not only helps China’s steel enterprises to expand overseas markets, but also promotes the layout adjustment of the global steel industry.

3. Patent innovativeness is remarkable

In recent years, the innovation ability of China’s iron and steel enterprises has been increasing, and the number of patent applications has been rising year by year. The study of ‘2023 Patent Innovation Index of Chinese Iron and Steel Enterprises’ shows that the number of patent applications filed by China’s steel enterprises during the period of 2018-2022 has shown a steady upward trend in general. Baosteel ranked first in the patent innovation index for six consecutive years, and Shougang, Anshan Iron & Steel, Pangangshan Iron & Steel, and China Metallurgical Group (CMT South) ranked 2~5.

In the ‘2023 Global Patent Innovation Index’, 4 Chinese steel enterprises entered the global top ten, and 14 steel enterprises entered the global top 30, matching China’s steel powerhouse. The patent innovation data confirms that China’s steel enterprises have become increasingly effective in adhering to innovation and development in recent years, and highlights the technological innovation capability of China’s steel industry.

4. Talents with higher and higher education level

With the rapid development of the iron and steel industry, the demand for high-quality talents is becoming increasingly urgent. In recent years, more and more highly educated talents choose to devote themselves to the steel industry.

In July 2024, Fangda Jiu Steel welcomed more than 40 fresh graduates of 2024 to join the company; Northeast Special Steel welcomed outstanding fresh college graduates from Northeastern University, Chongqing University of Science and Technology, Liaoning University, Liaoning University of Science and Technology and many other colleges and universities; Xianggang Steel welcomed 163 energetic young people, with 75 master and doctoral degree holders, accounting for 46% of the total number of young people, including graduates from Tsinghua University, China University of Science and Technology, Chongqing University, and many other A number of college graduates; Rongcheng Group had 51 new college students from Northeastern University, Liaoning University of Science and Technology, Hebei University of Science and Technology and other colleges and universities to participate in induction training activities; fresh graduates from Northeastern University, University of Science and Technology Beijing, Soochow University, Dalian Maritime University, and other key colleges and universities to join the Shagang family ……

According to statistics, the proportion of graduates expecting to be employed in the automotive/production/processing/manufacturing industry has been increasing year by year, showing the industry’s attraction to high-calibre talents. The addition of these highly educated talents has injected new vigour and dynamism into the steel industry, promoting its sustainable development.

5. Uninterrupted industry chain extension

In order to improve the added value and competitiveness of the industry, China’s iron and steel enterprises have to the upstream and downstream extension of the industrial chain.

Rizhao Lanshan District, through the ‘chain’ investment, to create the electroplating industry as the leading electroplating industrial park in Rizhao, up to now, Rizhao Electroplating Industrial Park has 20 projects on the ground, of which 7 projects under construction, the second half of the project started 13. All completed, is expected to achieve an annual output value of 13 billion yuan, profits and taxes of 600 million yuan.

In addition, Rizhao City Yulan new materials is Rizhao City, continue to extend the iron and steel industry chain and promote the ‘eat steel chewing iron’ project, after the completion of the project, the annual ‘eat steel chewing iron’ can reach 5 million tonnes.

Xinyu City focuses on advantageous land resources to guarantee the construction of key projects, and newly plans 3,000 acres of land specifically for the construction of the New Steel Industrial Park to take over the supporting enterprises of New Steel. Yushui District and Sinosteel, through the integration of dolomite mines with over 100 million tonnes of reserves and limestone flux mines in the vicinity, will be able to provide Sinosteel with an adequate supply of fluxes, which will alleviate Sinosteel’s dependence on external resources to a certain extent.

Jilin Jianlong’s high-quality new energy electromagnetic material project, the main plant has been closed into the debugging stage, is expected to the end of the year the units are put into production one after another. Jilin Jianlong will also focus on the implementation of 160,000 tonnes of oriented silicon steel, waste heat heating, steelmaking and rolling equipment upgrading projects. After the completion of these projects, the steel industry chain in Jilin City will be extended to new energy vehicles, high-end motors and other new areas, is expected to increase the annual output value of nearly 20 billion RMB.

The promotion and implementation of these projects not only enriches the steel industry chain, but also improves the added value and competitiveness of the whole industry.

6. Unmanned factories on the fast track

Intelligent transformation has become the key to enhance the competitiveness of steel enterprises. Since this year, ‘unmanned factories’ have risen rapidly in the steel industry.

Angang Mining Guanbaoshan company to equipment state perception intelligent, model intelligent diagnosis, operation improvement systematic as a grasp, the establishment of equipment predictive maintenance system, greatly optimised the equipment management process, improve work efficiency, to build a comprehensive ‘unmanned factories’ goal to take an important step.

Shagang Group successfully applied RAMON intelligent continuous casting and steel pouring unmanned platform, which has been stably operated for more than 8,000 furnaces in Shagang, with a success rate of more than 99%, truly realising the whole process of automation and unmanned steel pouring operation on the site of the continuous casting table.

Baosteel announced the full launch of AI strategy, the company will set 2024 as the first year of the comprehensive promotion of AI strategy, by the end of 2023, the company has been equipped with 1,424 industrial robots. According to the relevant plan of China Baowu, by the end of 2026, Baowu will achieve more than 10,000 sets of robots.

The implementation of these initiatives will drive the steel industry towards greater intelligence and efficiency.

7. Capacity Reduction Continues to Advance

In recent years, China’s iron and steel industry has experienced supply-side structural reform, and relevant departments have introduced a series of capacity control measures.

On 28-29 December 2020, the National Industry and Information Technology Working Conference pointed out that it resolutely compressed crude steel production and ensured a year-on-year decline in crude steel production.

On 1 April 2021, the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT) studied and deployed the work of crude steel output reduction, etc., and while maintaining the continuity and stability of the policy of supply-side structural reform of the iron and steel industry, they focused on the reduction of the crude steel output of the enterprises with poor environmental protection performance, high energy consumption and relatively backward technological and equipment level, avoiding the ‘one-size-fits-all’ approach. Avoid ‘one-size-fits-all’, and ensure a year-on-year decline in national crude steel production in 2021.

Hebei Province’s steelmaking capacity was reduced from a peak of 320 million tonnes in 2011 to 199 million tonnes of active equipment, achieving the goal of controlling it to less than 200 million tonnes.

Since 23 August 2024, the Ministry of Industry and Information Technology (MIIT) has suspended the publicity and announcement of new steel capacity replacement programmes.

The implementation of these measures will help optimise the capacity structure of the iron and steel industry and improve the overall efficiency of the industry.

8. Steel restructuring accelerates

On August 21, 2023, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Commerce, the General Administration of Customs jointly issued the ‘Steel Industry Stabilized Growth Work Plan’, which proposes to encourage the steel enterprises to carry out cross-region, cross-ownership mergers and reorganization, and to change the iron and steel industry in some areas, ‘small, scattered and chaotic’ situation. The situation of the iron and steel industry in some areas is ‘small, scattered and chaotic’.

On 28 December 2023, the People’s Government of Shandong Province and China Baowu signed a cooperation agreement, under which Baowu will hold a 49 per cent stake in Shanshan Iron and Steel Group and Baosteel will hold a 48.6139 per cent stake in Shanshan Iron and Steel Group Rizhao.

Hebei Province to build a national pilot area for industrial transformation and upgrading ‘14th Five-Year Plan’ has mentioned that the integration and restructuring of domestic and foreign iron and steel enterprises, to create a mega iron and steel group with global market competitiveness and discourse, the province’s top 10 iron and steel enterprises accounted for about 70% of the province’s production capacity in 2025; on April 21, 2023, the Hebei Province Department of Industry and Information Technology issued ‘Reply to Proposal No. 0639 of the First Meeting of the Thirteenth Committee of the Chinese People’s Political Consultative Conference (CPPCC) of Hebei Province’, encouraging large-scale private iron and steel enterprises to merge and reorganise within and outside the province, and giving key support in the development of grouping, mergers and reorganisation, extension of the industrial chain, and diversification of business resources allocation, forming a number of ten million tonnes of scale of the advantageous enterprises.

The implementation of these initiatives will promote the development of the steel industry in the direction of scale and intensification.

9. Short-flow circuit steelmaking gradually becomes mainstream

With the increase in the amount of scrap resources and environmental protection requirements, short-flow electric furnace steelmaking has gradually become the mainstream production process in the steel industry. According to the statistics of China Steel Association, in recent years, 27% of the planned new steelmaking capacity around the electric furnace, a total of 110 million tonnes or so, it is expected that the proportion of China’s electric furnace steel production in 2035 will reach 30%.

In recent years, some places have made positive exploration. For example, in Sichuan Province in 2023, the scale of short-flow electric furnace steelmaking reached 13 million tonnes, and the proportion of electric furnace steel production is about 40%.

This year, the National Development and Reform Commission and other departments issued the Special Action Plan for Energy Conservation and Carbon Reduction in the Iron and Steel Industry, and by the end of 2025, the utilisation of scrap steel will reach 300 million tonnes, and the proportion of electric furnace steel production in the total crude steel production will strive to be raised to 15%.

According to the strategic consulting report of the Chinese Academy of Engineering, it is predicted that around 2045, the electric furnace process will also replace the traditional blast furnace-converter long process to become the main production process in the iron and steel industry, and by 2060, the proportion of electric furnace process will increase to 50 per cent.

10. Special steel industry profitability highlights

Special steel because of its high value-added characteristics, in the industry to show stronger profitability. 2023 36 listed steel enterprises in 10 special steel enterprises to achieve a net profit of 13.187 billion yuan in 2023, 10 special steel enterprises in 9 of the profit.

In the first half of this year, steel enterprises operating under pressure, the performance of the general decline. In the first half of the general steel enterprise performance overall loss situation, 13 special steel enterprises during the same period, but the combined net profit of 4.823 billion yuan, an increase of 28.08%. Among them, in the second quarter, 13 special steel enterprises together to achieve net profit of 2.63 billion yuan, an increase of 19.92%, maintaining a good growth momentum

Industry sources believe that in the cost reduction and efficiency cultivation at the same time, the major steel companies also continue to add high-end production lines, production capacity, such as long materials to plate, general materials to special materials, and so on. The current steel industry is still in the bottom of the grinding stage, under the fierce competition, the relevant steel enterprises are also actively changing to adapt to the new development mode and development needs.