After years of development, China has become the world's steel output power. However, crude steel production hit new high on the occasion, plagued China's steel industry for many years, low value-added, low-margin, but always lingering chronic disease. Into the "five", the steel industry has also ushered in the transition opportunities. According to authoritative sources, one of the core guiding ideology upcoming iron and steel industry, "second Five Year Plan" is to the structural adjustment as the main direction of transformation and upgrading, expanding high-performance steel products, at the same time, it will strengthen the steel industry chain extension and downstream Collaborative development. Clearly, the road to higher value-added development of the steel industry in line with long-term trends. However, there was high hopes for the development of high-performance steel How? How to promote? Can help the industry out of the doldrums? Puzzles also will be a positive solution.

Restructuring imminent

China's steel industry has made in the "Eleventh Five-Year" rapid development, in 2010 the country has more than 600 million tons of crude steel production in 2011 exceeded 700 million tons is moving in direction. When the traditional steel production capacity bottleneck facing low value-added, high energy consumption, will have been eliminated when large-scale, high-performance steel products has become the industry crack resources, the environment and energy shackles, variety and restructuring to achieve a breakthrough.

Variety is not only one "five" new high-performance steel as a material planning policy priorities supported by the steel industry in the forthcoming "second five" plan, the development of high-performance steel is the top priority.

Ministry of Industry and Information Technology Division Director raw steel at Miao rule the people said, "Twelve Five" during the first to promote the upgrading of steel products. For the "towers" of steel products, mainly to enhance the quality and stability, and comprehensively promote the steel standard upgrade. For "high performance" steel products, with emphasis on strengthening the application, while encouraging the development of a small number of powerful enterprises high-end steel products, and support the development of special steel enterprises.

It is understood that the state will tax breaks, subsidies, and other forms of support for major projects to support research and development of iron and steel enterprises, research and development achievements in industry related facilities. More industry estimates, funds to support shared by business and government, or up to several hundred billion dollars.

In fact, the development and application of high performance steels involves a number of industries, only from the point of view of the steel industry, high-performance steel covering almost all varieties of steel high-performance products.

Deputy Secretary General of China Iron and Steel Association, chief analyst late Jingdong told the China Securities newspaper reporter, said, a high-performance steel "Twelfth Five Year Plan" is mentioned, mainly referring to the key steel varieties, both including the use of "large surface wide "varieties, such as high-performance steel, also including some high-quality, high value-added steel products, such as automobile panels, gear steel, high-speed train with moving rails, axles, high-pressure boiler plate, offshore platform steel, oil mining steel, steel and other transportation, including a large number of special steels and special materials.

Only steel, for example, as early as the beginning of this year, "the steel industry" second Five Year Plan "(draft)", the Special Steel has been specified key directions will be high-speed rail, urban rail transportation, marine engineering and offshore oil exploration, Large and special performance vessels and ships, energy-saving cars, UHV power grid and other high-end equipment manufacturing special steel.

Obviously, when the country entered the later stages of industrialization, the traditional "steel + cement" the extensive investment has been gradually declining, the evolution of the downstream transportation, machinery and other industries to high-end demand for the steel industry are contributing to the transformation and upgrading of product structure .

However, some high-end steel products, is facing weak domestic production, still rely on imports. "Some varieties of steel imported into the country than the larger domestic production can not meet demand." Some analysts pointed out that the domestic production of ordinary steel products accounted for a large variety, some cold-rolled, galvanized steel, silicon steel and other varieties have to rely on imports.

Overall, however, high-performance steel industry has been long-term trends. After years of development, China mainly rely on imports of steel products has been less and less, but with the ability to produce high-performance steel enterprises are still concentrated in a few large steel groups. "Domestic companies can produce high-end products, not a lot, and some varieties there are about ten companies to produce, some even only one or two." Chi Jingdong, said cold-like automobile panels, only Baosteel, Anshan Iron and Steel, Wuhan Iron and Steel Shougang these companies can produce, other companies have not yet reached this ability and level. Steel production is mainly concentrated in the Shanghai Baoshan Iron and Steel, Dongbei Special Steel and other enterprises.

It is understood that Baosteel as China's iron and steel enterprises, products are mainly used in the production of automobiles and shipbuilding, with high technological content and added value. Dongbei Special Steel is a steel production of "big", to maintain a high market share in the field of mold steel, automotive gear steel, bearing steel and other high-temperature alloys. In addition, high-grade oriented silicon steel Wuhan Iron and Steel, Maanshan Iron and Steel, high-speed wheel steel, Anshan Iron and Steel tanker cargo oil tanks Ship corrosion resistant, high strength emerging TISCO stainless steel and other products with high technical content.

Transition needs to downstream force

Development of China's steel industry is always accompanied by a variety of "contradictions": on the one hand, growth in crude steel production again and again, while steel prices continue to decline, but profit; on the other hand, restructuring voice continued, but low-end products supply and demand still booming. The reason why the formation of such a situation, it can not simply be attributed to the industry itself. As a microcosm of industrial development, the iron and steel industry to achieve the transformation, must not be separated from the upstream and downstream industries "force."

At present, China's steel industry overcapacity extensive development and product structure unreasonable problems caused increasingly prominent. 2010, China's crude steel output exceeded 600 million tons, the world's total output accounted for more than 40%. According to estimates, where crude steel production of about 100 million tons of excess capacity, especially in a large number of low-end products flooding the market, so that the profitability of steel prices fell sharply. Currently less than 10% of industry gross margin, the profitability of the national economy has become the lowest in the industry. This is the scale of production has been rising in stark contrast. More tangled, although the steel industry has always stressed that the adjustment of product structure, but the high value-added product development and production are still lagging behind, the domestic production capacity of some varieties of steel and special steels, still need to import large quantities.

The reason why the formation of such varieties supply structure, the downstream supply and demand and national policies and macroeconomic changes are not unrelated, this can glimpse from the various varieties of steel production change or two. Since the state has increased efforts in building affordable housing projects, the state has increased investment in water conservancy measures plus longs demand is relatively strong, long steel production in the first half grew 14.97%. In contrast plate and strip case, the automobile consumption growth was inhibited, lumber demand growth significantly weakened, particularly in cold-rolled products demand is not optimistic about the first half of the plate and strip production increased by only 9.34%.

In fact, it is the production of small and medium construction steel and other long products "main force", and issued out of the country the list of backward enterprises, SMEs accounted for the majority, which resulted in the elimination of backward and market demand contradiction between . It also reminds us from one side, the downstream demand attention and guidance is an important factor in the steel industry can smoothly transition.

Our country is in economic transition, ordinary steel demand will gradually slow down the development of automobiles, machinery, petroleum, electric power and other industries will drive growth in demand for high-end steel. Therefore, the steel industry product restructuring is the trend. In this context, strengthening the joint upstream and downstream industries even show its importance.

To solve this problem, adjust the pace of the upstream and downstream, coordinated rhythm is very important. The current high value-added steel products, although some Chinese production capacity, but the downstream market demand is not fully open, or use the standard does not match, resulting in the promotion of the presence of difficulty. In addition, some industry mainly rely on the introduction or development of international cooperation, steel products designed to be used depend on foreign steel standard, allowing users to import foreign steel. Therefore, not only the iron and steel industry to achieve the transformation, product upgrading and structural adjustment focused downstream steel industry is also imminent.

Insight pointed out that the steel industry can be established with the downstream industry associations and leading enterprises, end users, research institutes and other cooperation mechanisms to promote the establishment of demonstration platform for high-performance steel materials, iron and steel products to strengthen the standard upgrade and promote downstream steel design standard synchronous upgrading, development of upstream and downstream can collaborate.

The same can not be ignored is that the process of exploring the "five" in the development of high-performance steel varieties, production, application and even cooperation between industries are available through policies to advance, but the source for development of the industry - technology innovation, We need to get down to business investment.

Industry linkage imminent

"Five" high-performance steel developed soon, but relations industry in product development, production and application sectors has yet to be straightened out between. How to make the production of high-performance steel prices of steel products have practical applications? The most effective way is to build industry linkage mechanism to promote the production and demand side of the interaction.

Deputy Director at the Ministry of Steel and Raw Materials Division Xu Wenli pointed out that many aspects of high-performance steel constraints, promote more difficult, business and trade associations alone can not effectively coordinate the relationship between the parties and interests, it is necessary to rely on government forces to promote coordination, the establishment of cross-industry cooperation promotion mechanism.

"During the second five facing the steel industry upgrading, promote high performance steel will be mainly to industrial linkage of form." Chi Jingdong said concrete will draw on the Ministry of Industry and the Ministry of Housing together to advance high-strength steel model, with automotive, shipbuilding, power generation , machinery and other industries to promote the coordination group set up, from technology development, production applications, to use the standard revision, should take the form of collaboration and strategic cooperation between industries advance.

Ministry sources disclosed that the Ministry of Industry and Raw Materials Division Equipment Division is now working with the establishment of cooperation mechanisms shipbuilding industry. Ministry will actively promote the cooperation mechanism automotive, appliance, petroleum, railways and other areas of high-performance steel materials, iron and steel industry and focus on promoting steel industry product upgrading and structural adjustment, the whole industry chain of technological progress.

Slogan industry linkage, it is to promote the process of high-performance steel for the "lack of inter-industry linkage mechanism, the industry it alone," the number one crux.

In fact, only from the production side, the structure optimization of steel products in recent years, China has made some progress. Ministry data show that China's steel industry self-sufficiency rate increased from 84.3 percent in 2001 to 97 percent in 2010, and developed a number of high-strength steel used in construction, high-performance steel, large hydropower steel, high magnetic induction oriented silicon steel high-speed railway with rails, high-strength automotive sheet, aerospace Used alloys, earthquake-resistant building with high-strength steel rebar and other high-performance materials.

Since the self-sufficiency rate, currently most of our steel products have been able to achieve self-production. Steel Association said that from imports, at present, only 1,000 tons of domestic production of varieties with imported products in terms of quality and performance gaps, and the rest have been able to solve the basic autonomy. But the current problems is the promotion of high-performance steel and two-way cooperation needed to produce end user side, while the use of the current low proportion of high-performance steel materials.

In the construction of steel, for example, according to insiders, China's steel products are divided into Class II, III and IV and other brands, including, III grade IV grade steel high strength, good toughness, with high seismic performance. United States, Britain, Japan and other countries has been widely used III grade steel, while China is still the main application to II grade steel.

Promotion grade III rebar, rebar eliminated II level voice early in the 1990s had already seen, but has not been implemented, until recent years, it attracted attention. It is because of the lack of effective mechanisms downstream construction industry is still accustomed to the II grade steel as the main steel design, resulting in not link with manufacturers in practical application.

Last year, the Ministry of Housing had clear requirements, from July 1 this year, the state's key projects using III grade steel. Ministry of Industry and the Ministry of Housing has also been established jointly promote the use of high-strength reinforced coordination mechanism, promote "reinforced concrete Steel Standard" and "Design of Concrete Structures" convergence. Once the design specification changes, grade III or IV stage is "mandatory" application, it can cause the steel to upgrade from the demand side, thus boosting the development of the domestic construction steel industry. Insiders pointed out that in 2010 China's steel output exceeded 130 million tons, of which more than 400MPa high-strength steel production and a share of about 37%. III level and above, if the proportion of steel consumption and an additional 30% -50%, can save at least 10 million tons of steel.

Data showed that the "five-second" period, steel, hot-rolled strip steel, hot-rolled silicon steel will be phased out, will free up 78 million tons, respectively, the market space, 45.41 million tons and 585,000 tons. In addition, the steel plate in an amount of 40 million tons / year, of which the amount of high-end products accounted for only 5%, the product development space is very broad.

Industry will remain under pressure short-term

High-cost, high energy consumption, low value-added, low-margin ...... which has been plagued by the steel industry, "chronic disease." Insiders pointed out that, in the long run, high-performance steel industry development goals will lead to upgrading. But "distant water quench thirst" in the short term the steel industry is still faced with the pressure of raw material costs and management costs.

"Development of high-performance steel, and product upgrade is the industry long-term development goals. But in the short term, to control production costs and management of financial costs, the steel industry is still a serious problem." "My iron and steel" network analyst Xu Xiangchun pointed out, the high price of iron ore raw material costs brought about by high prices, it has become an important factor affecting the profitability of the industry.

According to CISA data, this year from January to July, China imported 389 million tons of iron ore, an increase of 7.81%, the average import iron ore CIF $ 162.76 / ton, an increase of 37.79%. By this calculation, China's imports of iron ore has to pay a $ 21.101 billion the previous year, equivalent to more than pay 137.195 billion yuan, a year and medium-sized iron and steel enterprises realized profits of 2.1 times.

Steel Association, Luo Bingsheng, deputy party secretary, said prices of imported iron ore is the main cause of a significant industry-wide low efficiency operation, the high price of imported iron ore to the whole industry has brought huge losses.

"Global iron ore prices continued price increases, so the declining profitability of steel companies, in turn, mining companies will greatly improve profitability." Luo pointed out that the first half of this year, CVRD profit of $ 13.28 billion, BHP Billiton profits $ 13.08 billion, exceeding the total profits of China's steel industry, the situation is extremely unreasonable. High iron ore imported steel industry has become the main cause of high cost and low efficiency.

If the high prices of iron ore are caused mainly due to the low profitability of the industry, the iron and steel industry in the management of higher financial expenses profit level is swallowed another "culprit." January to July, and medium-sized steel enterprises actual financial expenses 34.846 billion yuan, an increase of 33.51%, accounting for 1.65% of sales.

To solve these problems, Luo pointed out, should adhere to the "going out" development strategy to increase investment in overseas iron mines, development, equity participation, increase the proportion of overseas mining rights. At the same time, regulate the import iron ore market order, good iron ore import agent system and manage the flow of imported iron ore. In addition, the steel industry should be controlled financial expenses increased significantly, reduce the amount of physical inventory and the amount of funds used to ensure the rational flow of corporate funds, and improve the quality and efficiency.