Since late October 2020, the performance of steel prices has been extremely strong, and the steel price index has always been above 4,000 points. After entering December, driven by factors such as the rapid rise in iron ore prices and the resilience of steel demand in the south, steel prices continued to rise rapidly, hitting a new high in the past two years in the latter half of the year, and then under the dual restraint of fear of heights and policy regulation has fallen back.
Steel prices have been strong recently. Will the overall prosperity be maintained this year? How to grasp the fundamentals of the steel market during the "14th Five-Year Plan" period?
During the "11th China Iron and Steel Logistics Cooperation Forum" held on January 9, Wang Jianzhong, secretary general of the Iron and Steel Logistics Professional Committee of China Federation of Logistics and Purchasing, said in an interview with "Daily Economic News": "Looking forward to this year's In view of the current situation, I think a positive attitude should be maintained. This year, steel demand is expected to grow strongly, but at the same time, challenges cannot be ignored: there are still some uncertainties in the recovery of the global economy; the disorderly rise of iron ore will squeeze the profits of the supply chain , the release of steel mills' production capacity is not matched accurately with downstream demand, and intermediate distributors are afraid of heights... These all need to be treated with caution."
In 2021, the demand of the steel industry is still quite predictable. The latest steel PMI data released by the Steel Logistics Professional Committee of China Federation of Logistics and Purchasing shows that the steel PMI is expected to return to the expansion range in 2021, and sub-indices such as the production index and the new order index are expected to maintain an upward trend.
Wang Jianzhong believes that, on the whole, in the future, the entire industry still needs to tightly twist the main line of supply-side structural reform, pay attention to demand-side management, and form a dynamic balance in which demand drives supply and supply creates demand. "Overall, I think this year's opportunities outweigh the risks, and the industry situation is expected to continue to maintain a good momentum of development." Wang Jianzhong said.
Li Xinchuang, secretary of the Party Committee of the Metallurgical Industry Planning and Research Institute, pointed out that in the short term, China's steel consumption will remain at a high level. In 2020, under the influence of the state's active fiscal policies such as increasing tax cuts and fee reductions and expanding government investment, the demand for major downstream steel industries such as construction will increase, driving steel consumption to rise. Especially in the second half of the year, new real estate construction and construction area, automobile production, and ship production all increased, which strongly supported the steady growth of steel consumption.
"The rise in demand has also led to an increase in production. In 2020, China's global crude steel output is expected to account for 60% of the world. At present, 60% of our steel is driven by investment. Including equipment manufacturing and real estate, all aspects are still improving. We predict that this year Steel consumption is still growing, but I personally think it is difficult to grow on a large scale." Li Xinchuang told reporters.
2021 is the first year of the "14th Five-Year Plan", and investment is expected to increase periodically. Cai Jin, vice president of China Federation of Logistics and Purchasing, talked about the topic of steel development during the "14th Five-Year Plan" period: More economists have adjusted the potential growth rate to 6% growth, which is in the environment of 6% growth. Under the 14th Five-Year Plan period, the consumption of steel in the steel industry should remain at the level of 3% to 4%.
Cai Jin believes that during the "14th Five-Year Plan" period, there is room for market development potential for the steel industry. He predicted that the new consumption of my country's steel industry during the "14th Five-Year Plan" period should be 150 million tons to 200 million tons. It is expected that the consumption of steel for the whole year of 2020 will continue to grow on the basis of the high level of last year, and the total consumption will exceed 970 million tons.
The energy transition has forced the steel industry to break through and is still on the way. At present, the high price of imported iron ore has put my country's iron and steel enterprises under tremendous pressure of rising costs. In addition to the supply and demand changes behind this, it directly reflects that my country's iron and steel enterprises are facing the dual pressure of high concentration of overseas upstream and overseas index to determine the price.
Although the current scale of China's steel industry accounts for 53% of the world's total, Cai Jin believes that there is still a problem to reflect on, that is, our right to speak is relatively low compared to such a large scale as 53%. Why doesn't scale form our foundational capabilities?
Cai Jin believes that the core of this situation is that while the scale is relatively large, the concentration of the industry is not high. "The China Iron and Steel Association calculated a figure last year that the production capacity of the top ten steel companies accounted for 36% of the total production capacity in China, while the top three foreign companies accounted for 80% to 90%. So even if you account for a large proportion of the scale, you The concentration of iron ore is not high, resulting in the lack of right to speak, and it is impossible to talk to the three major iron ore merchants. Coupled with the economic and trade game, it will be difficult. Therefore, during the 14th Five-Year Plan period, the industrialization of steel will be The most important thing to improve ability is to improve concentration." Cai Jin said.
After the epidemic, the industrial structure optimization of the domestic steel industry is still continuing. In addition, in the process of balanced development based on land and space in the future, Cai Jin proposed that the key direction of the future layout of the steel industry will be in the west. More and more industries are going to the west.”
Focusing on the long-term goals of "carbon peaking" and "carbon neutrality", Li Xinchuang believes that under the premise of peaking carbon emissions in 2030, it will inevitably force the steel industry to accelerate energy transformation and further increase the proportion of new energy use.
"From the perspective of the international and domestic situation, under the background of carbon emissions peaking in 2030 and carbon neutrality in 2060, my country's steel industry will face greater pressure on energy transformation than other industries. In 2021, my country's steel enterprises will still make technological progress. And the application of key energy-saving technology projects, as the top priority of steel energy-saving work, the specific thing to do is to promote green layout, improve energy-saving efficiency, optimize energy consumption and process structure, build an industrial chain system, especially in the future to break through new low-carbon technology." Li Xinchuang said.