Recently, Li Xinchuang, executive deputy secretary-general of the China Iron and Steel Association and director of the Metallurgical Industry Planning Institute visited China Economic Net, and he received an exclusive interview with reporters on the topic of opportunities and challenges for Chinese steel companies going abroad.
Decline in growth in steel slumps and export optimism According to statistics, in 2011, China’s steel production was 683 million tons, and according to the latest statistics, it exceeded 700 million tons. In the first half of this year, China’s steel output only increased by 1.8%, which is more than 10% over the previous year. The growth rate has dropped significantly. At the same time, the growth rate of steel-related industries also fell sharply. The growth rate of investment was only 20.4%, real estate investment increased by 16%, railway investment dropped by 36%, and shipbuilding, machinery, and automobile industries all fell sharply or slowed down. the trend of. In terms of imports and exports, in 2011, China exported 48.88 million tons of steel and imported 15.88 million tons. In the first half of this year, it exported 27 million tons and imported 6.86 million tons. In the same period, imports fell by 13.4% and exports grew by 12%.
In response, Li Xinchuang stated that the steel industry is closely related to the development of the entire national economy. As China's economic growth rate is currently slowing down, the domestic steel industry has also been affected. Looking at the world, in the period of the global economic downturn, despite facing many pressures such as trade protection anti-dumping, China still maintains a certain growth in steel exports, which shows that the overseas steel market has a better demand for China.
“Chinese steel companies need to go global. The first is for resources and the second is for better markets. From the perspective of global steel construction and production, China’s steel is still relatively strong in global competitiveness. We have Such strength also has the opportunity to actively go out." Li Xinchuang said.
Reliance on high iron ore lack of pricing right Chinese steel companies have been going abroad since the 1980s. While building resources, they are also actively exploring the establishment of steel plants overseas. Li Xinchuang believes that objective conditions cannot be ignored in the development of iron and steel enterprises overseas. A stable political and economic environment, good market guarantees, and business order are the guarantees for setting up factories, and resource conditions are the foundation for development. At present, the most important issue facing China's steel industry in its development is that its dependence on foreign iron ore remains high for a long time. In 2011, China imported 686 million tons of iron ore, and its iron ore consumption accounted for 60% of the world's total, of which foreign dependence was over 60%. In addition, in the global iron ore trade, the three major mining companies control nearly 60%. This created three challenges of 60%: 60% consumption, 60% foreign dependence, and 60% control by the three largest mining companies. The iron ore price mechanism under this monopoly is not conducive to the development of China's current steel industry.
In May this year, the North Mine launched the first spot iron ore trading platform in China. In the two months, 22 transactions were completed and the total transaction volume exceeded 28 million tons. Li Xinchuang stated that in the past, iron and steel enterprises re-manufactured and traded lightly, and in the process of exploring open, transparent, and fair marketization, the North China ore iron ore trading platform was a useful attempt to promote the establishment of a reasonable and fair iron ore mine. The price of the stone is of great significance, but there is still a long way to go from the unified and reasonable operation of the trading platform to the more successful operation. In this regard, the government needs to increase the supply, accelerate the construction of domestic iron ore as soon as possible, but also accelerate the pace of overseas construction in order to be able to break the international price monopoly, gain the right to speak of pricing, and establish an effective iron ore mechanism.
Joint idea boosts the acceleration of internationalization of steel companies. According to media reports, CITIC Pacific Investment plans to invest US$2 billion in the construction of magnetite in Australia. By the end of 2011, the investment has exceeded US$8 billion. In this regard, Li Xinchuang believes that as the first time for domestic companies to build giant, low-mining ore mines abroad, the project is faced with numerous challenges including mining rights, geological resources conditions, mining conditions, external conditions, and neglects overseas labor costs. Due to legal and regulatory restrictions, the project's investment amount analysis has made mistakes. "This is a case that China's iron ore enterprises need to go abroad to get a good conclusion. We need to continue tracking and analysis. We can't influence the whole go-out strategy because of a so-called negative case," said Li Xinchuang.
Li Xinchuang pointed out that at present, the domestic steel industry is too fragmented, the concentration is too low, the homogeneity competition among various companies is fierce, and the team spirit among the enterprises is weak. These are the difficulties that are currently faced. Iron and steel companies need to reorganize themselves, improve their professional standards, increase the rational allocation of resources, and actively participate in international competition. In the face of challenges, we must encourage domestic enterprises to go out in an active, orderly and orderly manner and establish a long-term, stable, diversified, and highly efficient security system overseas. This is crucial for China’s steel industry and even the development of the national economy.
To this end, Li Xinchuang stated that the China Iron and Steel Association will continue to uphold the tenet of serving the enterprise, serving the industry, serving the government, and serving the society, insisting on the working methods of the enterprises, adhering to the three directions, and actively making use of the government and the enterprise. The bridge between enterprises, enterprises and markets will promote the healthy and orderly development of China's steel industry.
Decline in growth in steel slumps and export optimism According to statistics, in 2011, China’s steel production was 683 million tons, and according to the latest statistics, it exceeded 700 million tons. In the first half of this year, China’s steel output only increased by 1.8%, which is more than 10% over the previous year. The growth rate has dropped significantly. At the same time, the growth rate of steel-related industries also fell sharply. The growth rate of investment was only 20.4%, real estate investment increased by 16%, railway investment dropped by 36%, and shipbuilding, machinery, and automobile industries all fell sharply or slowed down. the trend of. In terms of imports and exports, in 2011, China exported 48.88 million tons of steel and imported 15.88 million tons. In the first half of this year, it exported 27 million tons and imported 6.86 million tons. In the same period, imports fell by 13.4% and exports grew by 12%.
In response, Li Xinchuang stated that the steel industry is closely related to the development of the entire national economy. As China's economic growth rate is currently slowing down, the domestic steel industry has also been affected. Looking at the world, in the period of the global economic downturn, despite facing many pressures such as trade protection anti-dumping, China still maintains a certain growth in steel exports, which shows that the overseas steel market has a better demand for China.
“Chinese steel companies need to go global. The first is for resources and the second is for better markets. From the perspective of global steel construction and production, China’s steel is still relatively strong in global competitiveness. We have Such strength also has the opportunity to actively go out." Li Xinchuang said.
Reliance on high iron ore lack of pricing right Chinese steel companies have been going abroad since the 1980s. While building resources, they are also actively exploring the establishment of steel plants overseas. Li Xinchuang believes that objective conditions cannot be ignored in the development of iron and steel enterprises overseas. A stable political and economic environment, good market guarantees, and business order are the guarantees for setting up factories, and resource conditions are the foundation for development. At present, the most important issue facing China's steel industry in its development is that its dependence on foreign iron ore remains high for a long time. In 2011, China imported 686 million tons of iron ore, and its iron ore consumption accounted for 60% of the world's total, of which foreign dependence was over 60%. In addition, in the global iron ore trade, the three major mining companies control nearly 60%. This created three challenges of 60%: 60% consumption, 60% foreign dependence, and 60% control by the three largest mining companies. The iron ore price mechanism under this monopoly is not conducive to the development of China's current steel industry.
In May this year, the North Mine launched the first spot iron ore trading platform in China. In the two months, 22 transactions were completed and the total transaction volume exceeded 28 million tons. Li Xinchuang stated that in the past, iron and steel enterprises re-manufactured and traded lightly, and in the process of exploring open, transparent, and fair marketization, the North China ore iron ore trading platform was a useful attempt to promote the establishment of a reasonable and fair iron ore mine. The price of the stone is of great significance, but there is still a long way to go from the unified and reasonable operation of the trading platform to the more successful operation. In this regard, the government needs to increase the supply, accelerate the construction of domestic iron ore as soon as possible, but also accelerate the pace of overseas construction in order to be able to break the international price monopoly, gain the right to speak of pricing, and establish an effective iron ore mechanism.
Joint idea boosts the acceleration of internationalization of steel companies. According to media reports, CITIC Pacific Investment plans to invest US$2 billion in the construction of magnetite in Australia. By the end of 2011, the investment has exceeded US$8 billion. In this regard, Li Xinchuang believes that as the first time for domestic companies to build giant, low-mining ore mines abroad, the project is faced with numerous challenges including mining rights, geological resources conditions, mining conditions, external conditions, and neglects overseas labor costs. Due to legal and regulatory restrictions, the project's investment amount analysis has made mistakes. "This is a case that China's iron ore enterprises need to go abroad to get a good conclusion. We need to continue tracking and analysis. We can't influence the whole go-out strategy because of a so-called negative case," said Li Xinchuang.
Li Xinchuang pointed out that at present, the domestic steel industry is too fragmented, the concentration is too low, the homogeneity competition among various companies is fierce, and the team spirit among the enterprises is weak. These are the difficulties that are currently faced. Iron and steel companies need to reorganize themselves, improve their professional standards, increase the rational allocation of resources, and actively participate in international competition. In the face of challenges, we must encourage domestic enterprises to go out in an active, orderly and orderly manner and establish a long-term, stable, diversified, and highly efficient security system overseas. This is crucial for China’s steel industry and even the development of the national economy.
To this end, Li Xinchuang stated that the China Iron and Steel Association will continue to uphold the tenet of serving the enterprise, serving the industry, serving the government, and serving the society, insisting on the working methods of the enterprises, adhering to the three directions, and actively making use of the government and the enterprise. The bridge between enterprises, enterprises and markets will promote the healthy and orderly development of China's steel industry.
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