"The entire industry through the implementation of central measures to respond positively, the epidemic on the steel industry basically did not have too much impact" ; "this year, next year, the steel industry 'bread' is still there" ; "At present, China's steel is not a 'big' problem, but how to be stronger, the concept of 'steel power' is proposed to be written into the '14th five-year plan' " ; "in the future, Shagang Group will accelerate the promotion of core competitiveness" ; In late July, the heat in Zhangjiagang was unbearable. Shen Wenrong, a Chairman of the Board of Shagang Group, made a series of views during an interview with reporters from China Metallurgical News and China Steel News, whisk off the impetuous heart, so that rational and sober light to the steel industry. In the first quarter of this year, affected by the epidemic, the steel industry and the national economy as a whole have been affected to varying degrees, including logistics difficulties, inventory increases and so on. How to look at the impact of the epidemic on the industry in the first quarter? "In fact, the industry as a whole has responded positively by implementing the central government's measures. The epidemic has had little impact on the steel industry, but has had a greater impact on sino-us relations. Although the steel industry increased some inventories in the first quarter, even without the outbreak, the first quarter itself was a trough in demand for the year, and inventories would have to be increased,"Shen said. In the first quarter, China's pig iron and crude steel output were 199 million tons and 234 million tons, respectively, up 2.4 percent and 1.2 percent year on year, according to the National Bureau of Statistics of the People's Republic of China. According to statistics from the China Iron and Steel Industry Association, in the first quarter, key large and medium-sized iron and steel enterprises recorded a revenue of 950.092 billion yuan, down 5.31 percent from the same period last year, and realized a total profit of 18.322 billion yuan, down 50.84 percent from the same period last year. "steel imports rose 9.7 per cent in the first quarter of this year, while exports fell 16 per cent, and together more than 20m tonnes are estimated to have remained in the domestic market. Therefore, from the inventory point of view, some increase over last winter, but compared with the same period last year, adjusted for changes in imports and exports, the actual inventory increase is not much, or at a reasonable level. Inventories have been falling since the second quarter,"Shen said. "But why has there been a big drop in profits? Because the increase in mineral prices is taking a bite out of profits. In the first quarter, China's iron ore price index (CIOPI) averaged 327.2 points, up 35 points, or 12.0 per cent, from a year earlier. At 1.6 tonnes per tonne of iron ore, almost 20 per cent of profits were taken by iron ore producers, while steel prices fell by only 5.0 per cent,"Shen said. So, from the point of view of 2020, the development trend of the industry? Shen pointed out that the steel industry's performance in the first half of the year exceeded expectations thanks to the precise regulation of policies, the strong industrial base under the reform and opening-up policy, and the firm confidence in the healthy development of the economy. "Can you still say that China's economy is not good when so much steel is used? " Shen asked. In his view, the first half of the year, the second quarter is better than the first quarter; the second half of the year in the third and fourth quarters certainly better than the first half. If you look at the 10 year cycle, 2020 is a normal year. In the first half of 2009, the Ferrous industry earned 3,186.04 billion yuan in operating income, down 3.8 percent year on year, and realized a total profit of 84.08 billion yuan, down 40.3 percent year on year. "In the first half of the year, the profit per ton of steel in China's iron and steel enterprises was between 100 yuan and 200 yuan, not as much as last year, but still within a reasonable range. Compared with the first-half loss of $1.68 BN OR ABOUT RMB11.7 BN for the world's biggest steelmakers, Arcelormittal is doing well,"said Shen. He pointed out that from the National GDP point of view, the first quarter fell by 6.8% , the second quarter grew by 3.2% , if the full-year growth rate is estimated at 3% , the third and fourth quarters will grow by 5% to 6% , we can basically determine that the second half of the economic performance is better than the first half. "However, there is still some uncertainty in the fourth quarter compared to the third. This uncertainty has to do with the pace at which the world economy returns to work and production, and the extent to which the world economy extends its influence on the Chinese economy,"Shen stressed. He believes that the uncertainty in the fourth quarter mainly includes several aspects: first, to see whether the third quarter can be used up excess inventory, and fourth quarter inventory can be further reduced; second, exports blocked imports increased, third, the international market low-cost resources including steel billet, steel into China, resulting in domestic prices; Fourth, the degree of tension between China and the United States and great uncertainty about the pace of resumption of production in other countries abroad. Fifth, with the further release of domestic production capacity, the situation of steel market oversupply may become more severe. According to data from the General Administration of Customs, from January to June, China's total exports of steel products totaled 28.704 million tons, down 16.5 percent year-on-year, while the total imports of steel products totaled 7.343 million tons, up 26.1 percent year-on-year. In terms of inventories, according to the China Iron and Steel Association, in the second half of June, key statistics showed that the steel stocks of steel enterprises totaled 13.62 million tons, an increase of 330,000 tons or 2.5 percent from the end of May, and an increase of 2.39 million tons or 21.3 percent year-on-year. In terms of production capacity, it is expected that nearly 80 million tons of crude steel production capacity will enter the market in 2020, which may lead to oversupply. "Therefore, the price of steel products (long products) may fluctuate between 3,800 yuan / ton and 3,900 yuan / ton in the third quarter, or even reach 4,000 yuan / ton, but it is very likely that there will be a large drop in the fourth quarter, and even a drop of 1,000 yuan / ton is not impossible, " Shen said. "Of course, if the above factors are not so serious, the fourth quarter will not be worse than the first quarter of this year. Next year will not be worse than this year, even better than this year, " Shen noted. He explained that his judgment has three main grounds: first, the rest of the world is resuming production; second, the domestic capacity control policy has been effectively implemented; Third, the economies of other parts of the world, such as Europe and Southeast Asia, rebounded strongly on the basis of negative growth. "A few days ago, the World Bank forecast that 2021 growth in China would pick up to 7.9 per cent, and let's be conservative and say 6.5 per cent next year would be better than this year. World Economic Recovery Needs Steel, China's economy to achieve faster growth needs steel. To be sure, the steel industry has bread this year and next year!"Shen stressed. "Put the concept of 'iron and Steel Power' into the '14th five-year plan' " 2020 is the "13th five-year plan" closing year, is also planning the "14th five-year" year. Xi Jinping, president of the General Secretary of the Communist Party of China and Central Military Commission, recently issued an important instruction to the 14th five-year plan-making work, stressing the importance of opening doors to ask questions and pool wisdom. "The development of China's steel industry to this day is no longer a question of 'big' , but how to make it 'stronger' . It can not be said that China's steel is not strong, more than 98% of the self-sufficiency rate of steel products can not be said not strong. The question is, how? The concept of 'iron and steel power' should be written in the 14th five-year plan, " Shen suggested. So what makes a great power of steel? First, high-end products to achieve full coverage. Where the country needs products, we must do Jackie Chan Supporting, and the R & D and production tasks to each specific enterprise. "What is the gap between China and foreign countries in steel production? What kinds of products can not be produced? As long as the national policy supports, we can do it. The steel industry should shoulder the responsibility to make the manufacturing industry strong, " Shen said. Second, consider raw material strategies at the national level. Domestic coal and coke can be self-sufficient, but 70% ~ 80% of iron ore imports, most of which from Australia. Data released by the General Administration of Customs showed that China imported 659.555 million tons of iron ore and concentrates from January to July, up 11.8 percent from 589.775 million tons in the same period last year. More than 60 percent of the imports were from Australia. "there is a great risk of being controlled by people when importing iron ore from Australia. Companies alone can not solve this problem. We must consider the problem at the national level, " Shen said. He suggested: First, to encourage domestic iron oreFirst, high-end products to achieve full coverage. Where the country needs products, we must do Jackie Chan Supporting, and the R & D and production tasks to each specific enterprise. "What is the gap between China and foreign countries in steel production? What kinds of products can not be produced? As long as the national policy supports, we can do it. The steel industry should shoulder the responsibility to make the manufacturing industry strong, " Shen said. Second, consider raw material strategies at the national level. Domestic coal and coke can be self-sufficient, but 70% ~ 80% of iron ore imports, most of which from Australia. Data released by the General Administration of Customs showed that China imported 659.555 million tons of iron ore and concentrates from January to July, up 11.8 percent from 589.775 million tons in the same period last year. More than 60 percent of the imports were from Australia. "there is a great risk of being controlled by people when importing iron ore from Australia. Companies alone can not solve this problem. We must consider the problem at the national level, " Shen said. He suggested: First, to encourage the development of domestic iron mines, do not "one-size-fits-all" all shut down, to rational development. Second, we should focus on the international market and control iron ore production capacity of 200 million tons to 300 million tons per year in other countries. For example, in resource-rich countries like South Africa and Brazil, from mines and railways to ports, it is suggested that all kinds of domestic enterprises should invest and operate together. Third, we should encourage the import of resource products such as scrap steel and coking coal. The quality of coking coal in international market is much better than that in domestic market. The full use of international resources is beneficial to enhance the cost competitiveness of domestic steel enterprises. "Right now, the price of mineral powder is controlled by people, operating in the dark. Singapore's PLATTS index uses a share of 1% to determine the price of 99% of ore fines. We should make it a rule that only steel mills can order ore fines and price them using the China index,"Shen said. It is reported that the platts iron ore index is the most important pricing benchmark, its data sources including telephone inquiries and other means to collect data from miners, steel mills and traders, regardless of whether the actual transaction occurred, there is a great element of speculation in it. "through national efforts, if the mineral price is lowered by $20 per ton and 1.2 billion tons of ore are imported each year, that's $24 billion, which is equivalent to building a super-large mine each year, " Shen lamented. Third, reasonably arrange the production capacity adjustment, put an end to the unreasonable relocation adjustment. One is that if steel companies fail to protect the environment locally, they will pollute elsewhere as well. "This kind of relocation is not necessary, and the transformation should be shut down on the spot. As a result of the relocation, production capacity will be further increased, " Shen noted. Second, do not control the converter and vigorously develop the electric furnace, converter can still eat scrap. About 270 million tons of scrap steel are produced each year, of which 260 million tons are consumed by the converter. Converter "eat" scrap more economic, but also more cost competitiveness, than the furnace cost at least 600 yuan per ton ~ 700 yuan per ton. "Now is not the time to develop electric furnaces. After 10 years, the output of scrap steel increased to more than 300 million tons per year, and the consumption of steel decreased to 500 million tons per year ~ 600 million tons per year. Now the development of electric furnaces, or in essence to increase production capacity."Shen Wenrong believes. Fourth, encourage and guide existing compliance enterprises to upgrade on-site, on-site product restructuring and upgrading, on-site energy-saving and environmental protection transformation, intelligent transformation. "In short, to further enhance the core competitiveness of enterprises, " Shen stressed. He pointed out that the steel industry to change ideas, raise awareness, on the existing basis to redouble their efforts to avoid self-torment, let the steel industry more healthy growth, to be stronger. SHAGANG GROUP'S "14th five-year Plan" will accelerate the promotion of core competitiveness in the first half of this year, in the face of a sudden new outbreak of pneumonia and complex and volatile domestic and international situations, based on the unified plan of "further upgrading of high-quality development, further strengthening of safety and environmental protection, further consolidation of basic management, and further breakthroughs in reform and innovation, " the Shagang group is working hard to prevent and control the epidemic, ensure the supply of materials and smooth transportation, on the basis of ensuring the relative stability of production and operation, and taking safety and environmental protection as the key, we should improve the list of duties to be performed, and try to spread it out on a trial basis. We should also grasp the public announcement of competition, examination and evaluation, and the ranking of indicators, so as to drive production to grasp high production and high efficiency, and business to grasp the control of wave bands, speed up the project norms, grasp the cost reduction, tap the potential and increase efficiency, the overall maintenance of stable and healthy development. "It's not as good as last year, but it's still good. Looking at the profit per ton of steel, Shagang Group is between 300 yuan and 400 yuan per ton. If accounting for the difference in financial cost and depreciation rate, Shagang's profit per ton of steel is about the same as that of the private steel enterprises with the highest profit per ton in the industry,"Shen said. He introduced that in the first half of the year, Shagang adopted three measures: first, it increased its efforts to adjust the product mix by producing more medium and heavy plates and increasing the output of ultra-thin strip products; second, it produced more products with good returns, produced less, produced no returns and did not produce, the third is to pay attention to internal adjustment, promote the use of robots, improve labor productivity. According to statistics, in the first half of this year, about 90,000 tons of export materials were delivered, of which 0.9 mm and less accounted for nearly 70% . Shagang Group took advantage of the improved market conditions since the second quarter to fully produce horsepower, iron, steel, timber production indicators basically achieved "half the time, half the task. ". At the same time, Shagang Group is vying to be at the forefront of green development. By the end of June, Shagang had completed 69 new round of projects for upgrading environmental protection standards, with a total investment of 8.5 billion yuan, sINTERING and power plant flue gas desulfurization and denitration, storage shed, new and upgraded dust collector, clean-up and diversion projects, "Quick Horse Whip" , tons of steel environmental operation costs more than 280 yuan. "Shagang has achieved good results by doing market analysis and seizing the opportunity to import a large number of steel billets in accordance with market price changes when exports are blocked, " Shen said, citing examples of market-oriented operations. It is reported that China imported 200 million tons of billet in the first half of the year, of which about 800,000 tons imported by Shagang. "these imported steel billets are more cost-competitive than those produced by enterprises themselves, " Shen said. In addition, Shagang also in the interior to grasp the potential of the standard, reduce costs and save costs. For example, the three blast furnaces in Yongxing, Anyang, have maintained stable and high production through strict implementation of operational guidelines, standardization of in-furnace operation and implementation of standard-setting analysis, through the measures of production optimization, target tackling and quality improvement, part of the plant's Daily and monthly output have set new historical records. "these work often unremitting, do not engage in a gust of wind, the effect is still good. " Shen Wenrong introduced. He believes that the current, all walks of life to speed up the recovery, the Chinese economy has shown strong resilience, the steel industry will usher in new development opportunities. Based on this, Shagang Group "14th five-year plan" the main goal is to do better, accelerate the promotion of core competitiveness. First, to further optimize and emphasize the product structure, in the forefront of the industry; to further enhance the level of environmental protection, to become a leading green development enterprises. Second, the Labor productivity is further increased to 2000 tons per person through intelligentization and robot use. Even 2500 tons per person per year. More than years, and continue to enhance innovation capacity to maintain the industry leading level. Third, we should continue to recombine into a more competitive steel enterprise through complementary advantages. "Shagang's consideration in the merger and reorganization is mainly to become a better enterprise through complementary advantages and not to pursue scale expansion unilaterally. Private enterprises must have a prerequisite to be big: they know their own capabilities, " Shen said. It is reported that after the restructuring of northeast special steel, Shagang has implemented the strategy of "special steel is more special, excellent steel is more excellent" . Through the input of management and talents, technology and so on, the northeast special steel has been brought back to life quickly, and from the second month of restructuring, it has turned a loss into a win. At the same time, in terms of product structure, it fills the shortage of high-end special steel of Shagang Group. "The enterprise development strategy is actually a sentence: to do their best, " Shen said.