An employee works at a plant
of China Baowu Steel Group in Maanshan, Anhui province. [LUO JISHENG/FOR CHINA
DAILY]
Optimism is growing despite downward pressure on China's steel
industry, with experts predicting a better supply-demand balance thanks to the
country's efforts to stabilize growth, new policies for managing crude steel
production, and increasing demand from emerging sectors like new energy
vehicles and solar power.
Fan Tiejun, the head of the China Metallurgical Industry
Planning and Research Institute, said there was an increasing need for some
steel products.
"For example, in shipbuilding, the transition from
oil-powered to gas-powered ships and the increasing use of liquefied natural
gas transport vessels demands high-resilience steel that can withstand
low-temperature and deep-cold environments," he said.
"In addition, surging vehicle exports are boosting new
orders for steel used in car transport ships, leading to increasing demand for
products like thin-spec shipbuilding plates."
In the first half of the year, the steel industry saw surplus
production amid sluggish demand, particularly due to the prolonged downturn in
the real estate market. As a result, the Ministry of Industry and Information
Technology, together with six other ministry-level authorities, released a plan
in late August to stabilize the growth of the steel industry through measures
such as promoting technological innovation to expand the use of high-tech steel
products in emerging sectors to boost demand.
Experts said the implementation of such policies, incentives for
the real estate market, and the traditional September-October peak season for
sales would help drive up demand, especially in the special steel sector, and
further stabilize prices, contributing to the industry's sustainable
development.
Special steels are those with physical and chemical properties
that provide higher strength and toughness than ordinary steels, and those that
serve specific purposes in areas such as aerospace engineering and
shipbuilding.
According to commodity price tracker Mysteel, in the first half
of the year, 23 of the 36 A-share-listed steel companies recorded profits, with
seven seeing year-on-year growth. Five of those seven were special steel
manufacturers.
Shenzhen-listed Jiangsu Changbao Steel Tube, a manufacturer of
high-tech-embedded steel tubes used for oil exploration and new energy
vehicles, topped the profit-growth list with a 150.6 percent surge to 450
million yuan ($62.35 million).The company said in its half-year financial
report that a primary reason behind the growth was the development of new steel
products in emerging sectors like new energy vehicles.
Experts said the development of high-end equipment
manufacturing, automotive, green energy, aerospace, and other emerging
industries in China would continue to drive up demand for special steels, and
the sector still had ample room for optimization and improvement in terms of
product structure and market applications.
Traditional steel companies have also stepped up efforts to seek
growth opportunities by providing steel products for emerging sectors. Angang
Steel, for example, has made breakthroughs in key technologies and products,
including its 690 megapascal low-temperature steel for carbon dioxide transport
ships.
"In recent years, Angang has continuously enhanced its
technological innovation capabilities and increased investment in research and
development to stand above the industry average," said Liu Fengqiang,
general manager of Angang's technology development department.
According to the China Iron and Steel Association, as policy
incentives to boost infrastructure construction, consumption and the real
estate sector take effect, the steel market's prospects will improve, and
overall steel demand will find a new balance after a period of output
reduction.
Fan also called for further efforts to set standards in the
steel sector, which he said was a crucial lever for promoting the sector's
high-quality development and a vital step for China to evolve from a big steel
producer to a competitive steel powerhouse.