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New trends in the steel industry have caused widespread concern

At present, the steel industry has undergone some new developments, which have a significant impact on product quality and have caused widespread concern in the industry. Analysts believe that the effect will be reflected in the steel market in the next few years.


The first is the reorganization of steel leading enterprises, and the goal is more clear. Recently, Baosteel exported its management to Maanshan Iron & Steel Co., Ltd. Although the action was hidden, according to relevant personnel analysis, its direction is merger and reorganization, and its goal is to become bigger and stronger. The reorganization of Angang and Benxi Steel's reorganization has heralded the emergence of another large-scale steel group with an annual output of 17 million tons to 18 million tons.


Secondly, it is a joint venture to build a factory to achieve the goal of improving the competitiveness of enterprises. Domestic steel companies have established joint ventures with foreign counterparts. The most typical is the joint venture between Baosteel and Nippon Steel to build a 1800mm cold rolling project and Benxi Steel and Posco in a joint venture to build a cold rolling production line. The products of these production lines are urgently needed in the domestic market, and can replace imported high-value-added, high-tech cold-rolled products such as automotive steel sheets and high-end home appliances. For foreign steel companies, they can penetrate into the market of high value-added products with huge demand in China through joint ventures; for domestic enterprises, it is conducive to enhancing the ability of technological innovation and enhancing the competitiveness of enterprises by improving product quality.


The third is “OEM” production, which shortens the growth period of the company. “OEM” production means that enterprises with extremely high brand value and market resources entrust other manufacturers of similar products to effectively use their resources for production and directly affix their own strong brand trademarks. Enterprises that carry out “OEM” production must meet the requirements and standards of brand exporters in terms of production technology, process flow, enterprise management, staff quality, quality control, and production efficiency.


For example, Guangdong Foshan Gaoming Foundation cold-rolled Baoli Baosteel became the first virtual factory in Baosteel. As an emerging cold-rolling enterprise, Gaoming Jiye has cooperated with Baosteel to greatly shorten the running-in period with the market through the unsuccessful procurement channels and mature sales platform of Baosteel Southern Company, and there is no worry about “breaking grain” in the future. Huge market risk; for Baosteel, it does not cost a penny to turn Gaoming Jiye into its own steel processing base, enriching Baosteel's sales in South China, meeting the multi-level needs of Baosteel's southern users, and stabilizing the south of Baosteel. The steel market has considerable strategic significance. The industry believes that with the birth of more new steel projects, the market competition is more and more fierce, and the form of OEM production may appear more.


Finally, the import of some steel raw materials has increased substantially, which has increased the quality pressure of domestic enterprises and improved the overall quality level of the steel industry in the survival of the fittest. According to the statistical analysis of Shanghai Customs, since 2004, China's ferroalloy imports have increased substantially. Taking Shanghai Port as an example, from January to July this year, the import of ferroalloys exceeded 110,000 tons, more than three times that of the same period last year. Among them, ferrochrome is more than 80,000 tons, an increase of 11 times; ferronickel is nearly 10,000 tons, a four-fold increase, which together account for 80% of the total ferroalloy imports.


Experts analyze that ferroalloy is an important raw material for steelmaking and mechanical casting. The production process consumes a lot of electricity, and it is an industry with less investment, quick effect and high profit. The national steel output has been at a high level in recent years, and the demand for ferroalloys has grown strongly. However, due to the cost structure of ferroalloys, the variable costs such as mine price, coke price and electricity price account for 90%. Therefore, the operating risks of ferroalloy producers are relatively high. Ferroalloy production enterprises, which are far away from raw material production areas and power plants, have low technology, single products and poor management, will be eliminated in the fierce market competition.