2023/3/31
During the 13th Five Year Plan period, the goal of reducing production capacity by 150 million tons in the steel industry was successfully completed, but issues such as mergers and acquisitions, green development, technological innovation, and carbon emissions reduction have not been effectively resolved, seriously constraining the development and efficiency of the industry. During the 14th Five Year Plan period, supply side structural reform will still be the main line of the steel industry, and low-carbon development in the steel industry faces significant challenges. There is a long way to go to achieve deep carbon emissions reduction, Li Xinchuang, Vice President of the China Iron and Steel Industry Association and Secretary of the Party Committee of the Metallurgical Industry Planning and Research Institute, pointed out in an interview with reporters from China Metallurgical Daily during the industry conference.
The steel industry will present five major development trends in the future
"Where is the limit of crude steel output? Where is the limit of market demand? Where is the limit of steel price? Where is the limit of iron ore price? How long is the period of anti globalization? How long is the period of COVID-19? How long is the period of policy adjustment?" Li Xinchuang shared several questions with the reporter of China Metallurgy Daily, and said that these uncertainties may disturb the development of the steel industry for a long time, Deep reflection on these questions can to some extent point the way for the future development of the steel industry
He believes that the steel industry will present five major development trends in the future:
Firstly, the important supporting role of steel in the national economy will continue. The steel industry, as the fundamental industry of the national economy, is one of the most internationally competitive industries in China. Li Xinchuang said, "During the COVID-19 pandemic, foreign steel companies have reduced production, stopped production, or even shut down and exited, while Chinese steel companies have basically maintained full production, playing a "ballast stone" role in ensuring supply, livelihood, and development
Secondly, the pressure of high supply growth will continue. Li Xinchuang explained that the pressure of high supply growth mainly comes from the following aspects: firstly, the enthusiasm of local governments to undertake and construct steel projects has increased. The second is that steel enterprises take the ultimate increase in capacity utilization rate as an important means to enhance their comprehensive competitiveness. The third is the comprehensive application of mature technology, comprehensive improvement of operational level, and comprehensive optimization of organizational management, which greatly improves the production efficiency of enterprises and effectively improves supply capacity. Fourthly, the steel industry in Southeast Asian countries has developed rapidly and is highly competitive in terms of production costs, posing significant pressure on China"s steel market. Fifth, in the context of international protectionism and anti globalization, China is facing an overwhelming pressure to build a new development pattern.
Thirdly, the characteristics of low cost and high quality as the core competitiveness of steel enterprises will continue. Li Xinchuang said: "China"s steel industry is a perfect competition market, and no steel product can achieve long-term monopoly. Under the high supply pressure, it will become the New Normal for the steel industry to maintain low profits and periodic losses in its overall operating efficiency. Therefore, cost reduction and efficiency increase of steel enterprises will be an eternal theme."
He believes that steel companies should not only be steel suppliers, but also service providers providing comprehensive material solutions. They should do everything possible to reduce customer costs, increase customer benefits, and help customers improve their competitiveness; Building an ecosystem from steel to materials, from manufacturing to services, from China to the world, and from individual enterprises to the entire industry chain is an inevitable trend for the future development of the steel industry.
Fourthly, policy high-pressure deterrence will continue. Li Xinchuang said that attaching great importance to standardized development and cracking down on illegal and irregular behaviors is the biggest difference in industrial policies since the 13th Five Year Plan, especially when the country can press the "pause button" at any time in response to new situations, problems, and situations.
He stated: Grasping negative examples and implementing high-pressure deterrence have become important means of strictly controlling new production capacity. Ultra low emission transformation has also become the main measure to force backward production capacity to exit and promote industrial structure adjustment in various regions. Enterprises that fail to meet ultra-low emission requirements within the deadline will not only face penalties such as production suspension and rectification, implementation of differentiated electricity prices, but may also be forced to exit. In addition, whether safety, energy consumption, technology, and other aspects meet the standards, and related measures The fulfillment of procedures such as public announcement, filing, land use, environmental impact assessment, and energy conservation assessment is related to the survival and development of enterprises
Fifth, large-scale and large-scale mergers and acquisitions in the industry will continue. Li Xinchuang emphasized that the steel industry is a typical cyclical industry, and enterprises with operational difficulties need to obtain new life through strategic investor restructuring. In order to achieve high-quality development in the steel industry, mergers and acquisitions must be promoted. Without improving the concentration ratio of the industry, it is impossible to achieve dynamic balance between production and demand and market stability when the industry is facing difficulties.
China"s carbon reduction process is still constrained by multiple factors
Currently, the battle to defend the blue sky has entered a critical period, and carbon reduction has become a global hot topic. How to achieve deep carbon reduction has become a test question in front of China"s steel industry.
Li Xinchuang introduced to reporters from China Metallurgical Daily that the main challenges faced by the low-carbon development of the steel industry are: firstly, insufficient energy resource endowment, with coal and coke accounting for nearly 90% of energy investment. Secondly, the production of crude steel is relatively large, accounting for more than half of the global production. Thirdly, there are a large number of enterprises, with over 500 enterprises with smelting capabilities, and there are significant differences in structure and level. Fourthly, the carbon emission mechanism is complex, involving various carbon emission mechanisms such as energy combustion emissions, industrial production process emissions, indirect emissions corresponding to electricity and heat consumption.
Undoubtedly, the steel industry is an important responsible entity for implementing carbon emission reduction targets, "he further explained, "The carbon emissions of the steel industry account for about 8% of the global energy system emissions, and the carbon emissions of China"s steel industry account for about 15% of the total carbon emissions of the country, making it the manufacturing industry with the highest carbon emissions. However, the process of carbon emission reduction in China is constrained by insufficient innovation capacity, imperfect technical tools, higher marginal cost of emission reduction, insufficient infrastructure construction and other factors."
Li Xinchuang proposes the following suggestions on how to establish the main path for carbon reduction in the future of the steel industry:
One is to save energy and improve energy efficiency. We should further save terminal energy, adopt mature and feasible advanced energy-saving and carbon reduction technologies, and accelerate the promotion and application of digital and information technology.
The second is to optimize energy consumption and process structure. We should optimize the structure of raw materials and fuels, develop electric furnace short process steelmaking, adopt multi energy complementarity, accelerate the development of non fossil fuels, improve the utilization rate of new and renewable energy, and actively promote clean energy substitution.
The third is to create a circular economy industry chain. Regional energy and resources should be integrated, solid waste treatment and resource utilization levels should be improved, and circular coupling development between upstream and downstream processes such as steel and petrochemical, chemical, non-ferrous metals, building materials, power, municipal, and related industries should be promoted.
The fourth is to increase the use of high-end steel. The use of steel with high strength, toughness, corrosion and wear resistance, fatigue resistance, and long service life should be increased; On the basis of meeting the requirements for the use of steel products, achieve the integrated application of structural lightweight design, lightweight materials, and lightweight manufacturing technology; Improve the yield of steel products and optimize the steel recycling system.
The fifth is to apply breakthrough low-carbon smelting technology and CCS/CCUS. The promotion and application of breakthrough technologies such as hydrogen metallurgy and carbon capture, storage, and utilization technologies (CCS/CCUS) are key to significantly reducing the overall emissions of carbon dioxide in the steel production process. At the same time, it is necessary to further strengthen institutional construction and policy system guarantees, and strengthen digital and intelligent control and evaluation of carbon emissions.
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