Zhan Tao Analysis: The steel industry is changing from "reducing" to "strong environmental protectio

China's steel industry is facing severe challenges in its transition from "reducing volume" to "strong environmental protection" 
On October 22-23, "The 12th China Steel Summit Forum and 2020 Steel Industry
Development Outlook" conference was held in Zhengzhou. Guests from government agencies, industry associations, steel enterprises and other related fields at the meeting look forward to the later trend of steel prices, planning the future development of steel, helping the steel industry chain optimize and upgrade. 
Participators said that at present, China's economy is in an important stage of transformation and upgrading. China's steel industry should speed up the scale-effective to quality-effective transformation, to achieve a high-quality steel industry system. 
"The development of the steel industry is closely related to economic development, we should not only pay attention to the overall trend of the economy, but also focus on the structure of the economy. With the development of China's high-quality development, as the most important basic industry, 'industrial grain', high-quality industrial system can be built up, only with high-quality steel as a support.” Li Xinzheng, vice president of the China Iron and Steel Association and president of the Metallurgical Industry Planning Institute, said at the meeting. 
In Li Xinzheng's view, China's steel industry is in the "reduce" stage. "I simply divided the development of steel into five stages - incremental, reduction, strong environmental protection, joint restructuring, and low-carbon stage. From the perspective of the current situation, China is still in the transition stage from reduction to strong environmental protection.” He said. 
In fact, in recent years, China's steel industry has made a number of world-leading achievements, but it still has some deep-seated problems in the period of rapid development. 
"First, de-production capacity of steel are not compatible with supply-side structural reform requirements. After more than three years of efforts, the steel industry has defused about 300 million tons of excess capacity, but with the de-reduction of capacity, production has increased, thus creating some new problems.
Second, the industrial structure is not suitable for market competition. For a long time, the structure of the steel industry is decentralized, and the concentration is relatively low, resulting in upstream and downstream premiums. And the market in the orderly competition is lack of control and self-discipline. On the one hand, although the concentration of the steel industry has been improved, but there is a large gap from the target of 60%. On the other hand, although the industrial layout has been improved, but it is still unreasonable. The efficiency of social resource allocation is low. Li Cunlao, vice chairman of Anyang Iron and Steel Group, said at the meeting. 
In addition, China's steel industry is also faced with the problem that green level of development are not suitable for ecological environment needs. 
From the actual operating condition, this year, by the real economic contradictions and slowdown, increasement of raw material prices and other factors, the steel industry's high profit situation has not been able to continue, there is a trend of increasing production but not increasing efficiency. 
From January to August, the national crude steel production was 665 million tons, increasing by 6.1% year-on-year. In contrast to the excessive growth in steel production, steel prices have oscillated downwards, causing overall profits fall by 29%. 
As the marginal effect of de-production pull decreases, the deep-seated problems that
have been obscured by the sharp rise in steel prices in the last two years gradually emerge. If these problems are not solved, it is likely to lead to a serious imbalance between steel supply and demand, and even a return to the overall loss of the steel industry.