During the 13th Five-Year Plan period, the target of cutting production capacity by 150 million tons in the steel industry was successfully completed. However, problems such as merger and reorganization, green development, technological innovation and carbon emission reduction have not been effectively solved, seriously restricting 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. The low-carbon development of the steel industry faces great challenges, and achieving deep carbon emission reduction is still a long way to go.”Li Xinchuang, vice President of China Iron and Steel Association and Party secretary of metallurgical Industry Planning and Research Institute, said in an interview with China Metallurgical News on the sidelines of an industry conference on November 7.
The steel industry will show five development trends in the future
“What is the limit of crude steel production?Where is the limit of market demand?Where is the limit of steel price?Where is the limit for iron ore prices?How long is the cycle of de-globalization?How long is the impact cycle of the COVID-19 epidemic?How long is the policy adjustment cycle?”Li xinchuang Shared some doubts with China Metallurgical News, saying that these uncertainties may disturb the development of the steel industry for a long time. “Deep thinking on these questions can, to a certain extent, point out the direction for the future development of the steel industry.”
In his opinion, the steel industry will present five development trends in the future:
First, the important supporting role of steel for the national economy will continue.As the basic industry of national economy, iron and steel industry is one of the most internationally competitive industries in China.“During the COVID-19 epidemic, foreign steel companies have cut production, stopped production or even shut down, while Chinese steel companies have basically kept production at full capacity, playing the role of ‘anchor stone’ to ensure supply, people’s livelihood and development,” Li said.
Second, high growth pressure on supply will continue.Li Xinchuang explained that the high growth pressure of supply mainly comes from the following aspects: First, the enthusiasm of local governments to undertake and build steel projects is high.Second, the iron and steel enterprises take the limit of capacity utilization as an important means to enhance the comprehensive competitiveness of enterprises.Third, the comprehensive application of mature technologies, the comprehensive improvement of operation level and the comprehensive optimization of organization and management make the production efficiency of enterprises greatly improved, so as to effectively improve the supply capacity.Fourth, the rapid development of the steel industry in Southeast Asian countries, in the production cost is very competitive, China’s steel market to form a greater pressure.Fifth, against the background of international protectionism and anti-globalization, China is forced to construct a new pattern of development.
Third, the characteristics of low cost and high quality as the core competitiveness of steel enterprises will continue.“China’s steel industry is a perfectly competitive market and no steel product can be monopolized for a long time,” Mr Li said.Under high supply pressure, it will become the new normal for the iron and steel industry to maintain low profit and periodic loss in overall operating efficiency.Therefore, the reduction of costs and efficiency of iron and steel enterprises will be an eternal theme.
He believes that steel enterprises should not only be steel suppliers, but also to provide comprehensive material solutions to the service providers, should be tens of thousands of customers to reduce costs, increase customer benefits, help customers to improve competitiveness;It is an inevitable trend for the future development of the steel industry to build “an ecosystem from steel to materials, from manufacturing to services, from China to the world, and from a single enterprise to the whole industrial chain”.
Fourth, policy coercion and shock and awe will continue.Li said that attaching great importance to standardizing development and cracking down on illegal behaviors is the biggest difference between industrial policies and the past since the 13th Five-Year Plan period. In particular, the country can press the “pause button” at any time for new situations, problems and situations.
“Focusing on negative models and imposing high pressure and shock and awe have become important means of strictly controlling new capacity,” he said.Ultra-low emissions transformation has also become a major measure for local governments to withdraw backward production capacity and promote industrial restructuring.Enterprises that fail to meet the ultra-low emission requirements within the deadline will not only be punished by suspending production and implementing differentiated electricity prices, but may also be forced to quit.In addition, whether the safety, energy consumption, technology and other aspects meet the standards, as well as whether the relevant public announcement, filing, land use, environmental impact assessment, energy conservation assessment and other procedures are implemented, are related to the survival and development of enterprises.”
Fifth, the industry’s large-scale, large-scale merger and reorganization will continue.Li xinchuang stressed that the steel industry is a typical cyclical industry. Enterprises with difficulties in operation need to be reborn through restructuring by strategic investors, and the steel industry must promote merger and reorganization to achieve high-quality development.Without increasing industrial concentration, it is impossible to achieve dynamic balance between production and demand and market stability through industry self-discipline when the industry is facing difficulties.
China’s carbon reduction process is still constrained by many factors
At present, the battle to protect the blue sky has entered a crucial period, and carbon emission reduction has become a hot topic in the world.How to achieve deep carbon emission reduction has become a question in front of China’s steel industry.
Li Xinchuang told China Metallurgical News that the current low-carbon development of the steel industry faces the following major challenges: First, the lack of energy and resource endowment, with coal and coke accounting for nearly 90 percent of the energy input.Second, crude steel production is large, accounting for more than half of the global output.Third, there are a large number of enterprises, with smelting capacity of more than 500 enterprises, and the structure and level of large differences.Fourth, the carbon emission mechanism is complex, involving a variety of carbon emission mechanisms such as energy combustion emission, industrial production process emission, indirect emission corresponding to power and heat consumption.
“There is no doubt that the steel industry is an important subject of responsibility for the implementation of carbon reduction targets.”He further explained, “The steel industry accounts for about 8% of the global energy system’s carbon emissions, and China’s steel industry accounts for about 15% of the country’s total carbon emissions, making it the manufacturing industry with the highest carbon emissions.However, the process of carbon emission reduction in China is constrained by the lack of innovation capacity, imperfect technical tools, increasing marginal cost of emission reduction and insufficient infrastructure construction.
For the steel industry in the future how to establish the main path of carbon emission reduction, Li Xinchuang proposed the following Suggestions:
First, energy conservation and improvement of energy efficiency.It is necessary to further economize terminal energy use, adopt mature and feasible advanced energy saving and carbon reduction technologies, and accelerate the popularization and application of digital and information technologies.
The second is to optimize the use of energy and process structure.We should optimize the structure of raw fuels, develop short-process steelmaking in electric furnaces, adopt multi-energy complementaries, accelerate the development of non-fossil energy, increase the utilization rate of new and renewable energy sources, and actively promote the substitution of clean energy sources.
Third, we will build an industrial chain of circular economy.Regional energy and resources should be integrated to improve the level of solid waste treatment and resource recovery, and to promote the cyclic coupling development between steel and petrochemical, chemical, non-ferrous metal, building materials, electric power, municipal and other upstream and downstream processes and related industries.
Fourth, increase the use of high-end steel.The usage amount of steel with high strength and high toughness, corrosion and abrasion resistance, fatigue resistance and long life should be increased.On the basis of satisfying the requirements of steel products, the integrated application of structural lightweight design, lightweight materials and lightweight manufacturing technology is realized.Improve the steel yield and optimize the steel recycling system.
Fifth, apply breakthrough low carbon smelting technology and CCS/CCUS.The key is to greatly reduce the overall carbon dioxide emissions in the steel production process, and the popularization and application of breakthrough technologies such as hydrogen metallurgy and carbon capture, storage and utilization technology (CCS/CCUS).At the same time, the system construction and policy system guarantee should be further consolidated, and the control and assessment of carbon emission should be strengthened through digitalization and intelligence.
