China's steel industry restructuring has taken a new step

On May 28, the investment of more than 60 billion yuan, the scale of the 10 million tons of Guangxi Fangchenggang steel base project started. On the 31st, the Zhanjiang Iron and Steel Base Project in Guangdong, which is several hundred kilometers away from Fangchenggang, has also started. Two large-scale steel projects have been approved for construction, marking an important step in the transformation of China's steel industry in terms of structural adjustment and development. In the past few years, the development and planning of China's steel industry has been in the south, and the construction of coastal steel bases has been stalled. In 2009, the Chinese government imposed strict controls on the steel industry for three years without new projects. In addition to the relocation of Shougang and the Wenchuan Earthquake Reconstruction Project, the layout adjustment tasks of Baosteel Zhanjiang, Wugang Fangchenggang and other coastal steel bases and the relocation of urban steel mills have basically failed to be implemented. The state approval control and the construction of large-scale steel projects failed to stop the expansion of steel production capacity. As a result, the development of large-scale steel enterprises was hindered, and the capacity of local small and medium-sized steel mills expanded rapidly. According to the data of the Metallurgical Industry Planning and Research Institute, as of the end of 2011, China's crude steel production capacity has reached 900 million tons, and 79% of the 357 million tons of production capacity that has been built since 2005 has not been approved by the state. Some people think that China's current steel production capacity has reached 900 million tons, and the production capacity is seriously over-capacity. The construction of a large-scale steel base will intensify the overcapacity of the industry and push the steel industry to the abyss. In fact, this reflects the dilemma of China's steel industry, that is, the contradiction between controlling production capacity and upgrading the industrial level. However, the root cause of this problem is that large-scale steel projects have not been approved by the state, which has caused small steel mills to have space for intervention, which eventually led to low-level redundant construction of China's steel industry. Base construction adjustment operation status Now, the government approves the Guangdong-Guangzhou coastal steel base, which will improve the operational efficiency of steel enterprises, curb the industrial production capacity and the overall layout of the steel industry, and thus enhance China's steel industry as a whole. First, the construction of coastal steel bases will enhance the efficiency of business operations. The outstanding advantage of large-scale coastal steel bases is that they build factories in Hong Kong, have the advantage of logistics cost, and reduce the transportation costs of raw materials and finished products. The construction of coastal steel bases in Guangdong and Guangxi has a natural port advantage. The port depths of Fangchenggang and Zhanjiang are close to 20 meters. Currently, they have the berthing capacity of 200,000-ton and 250,000-ton cargo ships. Therefore, the construction of coastal steel bases requires the terminal facilities to go ahead. Second, the release of capacity from the steel base will inhibit the expansion of capacity of small and medium-sized steel mills. In the case of overcapacity, the steel industry suffered a total loss. It is now the worst time for the Chinese steel industry in the past 10 years, and it is also the best time for the steel industry to adjust. Local governments have relaxed their control over local steel companies. For example, the successful restructuring of Linggang Group by the Central Enterprise Port China Travel Service is an example. In the past, new steel mills in North China and other regions used South China as an important sales area, which led to the obvious characteristics of China's steel market “Northern Steel South Transportation”. At present, the construction of the Guangdong-Guangzhou iron and steel base will be directly supplied to local steel enterprises, which will have a certain inhibitory effect on the expansion of national steel production capacity. In addition, entering the “Twelfth Five-Year Plan” period, China's steel industry will enter the peak area of ​​the industry, which is the best period for industrial transformation adjustment. In addition, accelerating the construction of coastal steel bases will enhance the level of China's iron and steel enterprises, meet the needs of domestic high-end varieties, and play a certain import substitution role. Third, the construction of coastal steel bases will adjust the layout of the steel industry. The construction of the Guangzhou-Guangzhou iron and steel boutique base will re-adjust the layout of the steel industry and correct the imbalance in the regional layout of the steel industry. China's steel industry is highly densely distributed in inland water-deficient areas such as North China and Northeast China. Supply and demand are out of line in the region, and production capacity layouts in South China and Northwest China are not matched. Steel production in the Pearl River Delta and surrounding areas cannot meet regional demand. Accelerating the construction of Zhanjiang and Fangchenggang steel boutique bases will help ease the contradiction between supply and demand. There is a shortage of large steel mills in South China, and the supply is relatively insufficient. Guangdong and Fujian need to import a large amount of steel. Taking Guangdong as an example, Guangdong's annual steel consumption has reached 50 million tons, and consumption accounts for 10% of the country's total steel consumption. In 2010, Guangdong's steel output was only 29.18 million tons. A large amount of steel needs to be shipped from the north. Some need to be imported. In 2010, Guangdong imported 5.92 million tons of steel, accounting for 36% of China's total imports, accounting for the first in the country. The Baosteel Zhanjiang Project and the WISCO Fangchenggang Project are in the midst of a South China market with a huge supply gap. Moreover, the steel structure of Guangdong Province is relatively high-end, and home appliances and automobiles can consume a large number of high-grade cold-rolled sheets every year. Of course, the construction of coastal steel bases will pose a serious threat to the traditional northern steel mills, and the follow-up construction of Fujian and Jiangsu coastal steel bases will continue to adjust the imbalance of China's steel industry layout, changing the steel supply “Northern Strong South” situation. In addition to adjusting the industrial layout and upgrading the level of the steel industry, it is important to adjust the industrial layout for the future development of the industry. It is important to adapt to the changes in China's steel demand in the coming decades and prepare for future steel exports. First of all, this will meet the consumption growth of China's future plate and other varieties. In the long run, China's plate and other varieties have great growth potential. In recent years, the building materials market is selling well, and the construction steel enterprises are better than the plate varieties. This is due to the specific environment of economic development. The characteristics of China's steel demand urbanization stage are obvious. The steel used in the construction industry accounts for 50% of the total steel production, and the steel for machinery manufacturing accounts for 20% of the total steel demand. Secondly, from the perspective of social steel structure, there is potential for growth in future plates, especially high-end varieties. After the completion of urbanization, the society entered a steady-state structure, the consumption of construction steel declined, and the consumption of plates and other varieties increased. For example, in 2000, the proportion of plate production and consumption in the United States and Japan reached more than 60%. Once again, the construction of the Guangdong-Guangzhou iron and steel base will lay out China's steel exports in advance. At this stage, China's steel production is in the stage of satisfying its own needs. Steel exports account for less than 10% and net exports are less. The coastal steel base will become the main force for China's steel exports in the future. The export advantages of the Zhanjiang and Fangchenggang projects are close to ASEAN and India. The apparent consumption of steel in the ASEAN region reached 50.5 million tons in 2011, an increase of 40% in the five years from 2006; India's steel demand growth rate will reach 8% in fiscal 2012, and India's steel demand will double by 2020. . Adjacent to India and ASEAN, Baosteel and other enterprises have occupied geographical advantages in competition with Japan and South Korea steel mills in Southeast Asia and South Asia.

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