By Han Xin
The Chinese authorities issued a guideline on promoting the high-quality development of the steel industry, which specified that the Chinese steel industry mainly aims to form a high-quality development pattern characterized by a reasonable layout and structure, a stable resource supply, advanced equipment techniques, high-quality products and outstanding brands, high level of intelligence, strong global competitiveness, as well as green, low-carbon and sustainable development by 2025.
Last year, China’s steel industry achieved impressive performance and maintained solid growth momentum. Major large and medium-sized steel companies reported cumulative revenue of 6.93 trillion yuan ($1.09 trillion), a year-on-year increase of 32.7 percent; their total profits reached 352.4 billion yuan, up 59.7% from a year earlier.
This is attributed to the strong market demand last year as well as the progress of structural reform on the supply side of the industry in recent years, said Luo Tiejun, vice president of the China Association of iron and steel.
According to Luo, China’s steel industry has achieved significant results in eliminating excess capacity, adjusting structure and promoting modernization during the period of the country’s 13th five-year plan (2016-2020). ).
During this period, the industry has reduced its crude steel production by more than 150 million tons, Luo said, adding that the annual labor productivity of the main links in the production of steel products fell from 527 tons per person to 850 tons per person.
China is now in the advanced stage of industrialization and in the middle and advanced stage of urbanization; domestic demand for steel products will remain at a high level in the coming years, boosted by the country’s tasks to achieve industrialization and urbanization, said Li Xinchuang, chief engineer at the Institute of Planning and metallurgical industry research center in China.
Li believes that 5G, industrial Internet and other next-generation information technologies provide favorable conditions for the transformation and upgrading of the steel industry.
The data suggests that the digital control rate of key processes in China’s metallurgical industry and the percentage of digital production equipment in the industry reached 65.4% and 47% respectively in 2020, signifying a high level. digitization in the sector.
Smart transformation is a systematic project that covers all industry links, from purchasing, design to production and sales, Luo noted, adding that smart manufacturing in China’s steel industry faces problems, including uneven capacity, incomplete standards, and an insufficient supply of software and hardware.
The guideline, which was issued jointly by the Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC) and the Ministry of Ecology and Environment (MEE), pointed out that China intends to lift the digital control rate. key processes in the metallurgical industry and the proportion of digital production equipment in the industry to around 80% and 55%, respectively, and build more than 30 smart factories by 2025, which is expected to help the industry steel industry to quickly pass intelligent development path.
In the future, the steel industry should stick to intelligentization-oriented technological innovation, focus on intelligentizing equipment operation and maintenance, improving the transparency of production processes , global supply chain collaboration and environmental protection management, and integrate 5G, industrial Internet, artificial intelligence. (AI) and other new technologies in manufacturing and operation, aiming to cultivate new competitive strengths, Luo said.
During the 13th Five-Year Plan period, China’s dependence on imported iron ore exceeded 80%. Heavy dependence on imports and rising prices of imported ore have eroded the profits of the country’s steel industry and downstream industries and threatened the safe and stable operation of the industry, Luo said.
In response to the risks facing the supply of iron ore, the directive proposes to establish a system for iron ore production reserves and mining land.
Noting that iron ore is an important strategic resource related to the economy and people’s livelihood, Li said the establishment of such a system should become an important regulatory measure to stabilize the price. of the iron ore market and ensure the security of the industrial chain.
The guidelines also state that the country will encourage the import of resource products and semi-finished products in the industry. China’s imports of resources and semi-finished products have been at a high level in recent years, Luo noted, adding that making full use of international and domestic scrap resources will help the country reduce its dependence on from imported iron ore, reduce energy consumption and carbon emissions. emissions and better ensure resource security.
China should also strengthen the use of international iron ore resources. According to Luo, it is important to strengthen investment and development of foreign mineral resources and increase the proportion of rights and interests in foreign resources in order to diversify the sources of foreign resources and effectively improve the country’s capacity. to secure resources.