Accelerating Four Transformations and Promoting China's Steel Industry to Become Bigger and Stronger

This year is the beginning of the 12th Five-Year Plan. During the "12th Five-Year Plan" period, the country will vigorously promote all-round strategic adjustments such as demand structure, industrial structure, input structure of production factors, urban-rural structure and regional economic structure, and achieve economic transformation and upgrading. The external environment and conditions for the development of China's iron and steel industry, especially the market demand structure, will surely change significantly with the country’s economic restructuring. We should have sufficient understanding of this. In the past 10 years, China's steel industry has faced high growth in domestic and foreign market demand, and the historical development stage that has driven high growth in steel production has passed. In 2010, the number of express steels issued by the National Bureau of Statistics was 62.665 million tons, an increase of 53.08 million tons over the previous year, an increase of 9.26%, 3.34 percentage points lower than the increase in 2009, but due to the net exports of steel, billet-reduced crude steel increased 24.45 million tons, the actual apparent domestic crude steel consumption only increased by 5% over the previous year, which can indicate that the future domestic average annual growth rate of apparent consumption of crude steel double-digit era is over. The "12th Five-Year Plan" period will mean that China's steel industry has entered a low output growth rate, the quality structure of its varieties has been further optimized, energy-saving and emission-reduction effects have become more significant, and the extension construction of steel upstream and downstream industrial chains has been further strengthened, and the market competition mechanism for the survival of the fittest has been further improved. , The new stage of historical development in which the enterprise's innovative ability is further improved.

I. Accelerating the Four Transformations is the Only Way to Build a Powerful Iron and Steel State The work report of the Council of President Deng Qilin on behalf of the Association proposes that the Chinese iron and steel industry implement the spirit of the “12th Five-Year Plan” recommendations of the Central Government and must accelerate four changes. That is to say, in production and management, the pursuit of output expansion, extensive management of increased resource input, shift to the intensive management that focuses on improving the quality and efficiency of varieties, and relying on technological advancement, scientific management, and talent growth, should be the only changes in business development. Pay attention to the development of the iron and steel industry, and focus on the development of a steel industry, which is both a major steel industry and an upstream and downstream steel industry chain, and appropriately develop related multi-industry industries; Land development, development in the coastal and near areas of raw materials, close to the user; in technological innovation, it is necessary to digest the introduction of technology integration innovation, and gradually to more original invention innovation, can guide the development of the industry. Practice has proved that these four changes are the only way to build a strong steel country.

In 2010, member companies with financial statements of the Iron and Steel Association produced 51.33 million tons of steel, achieved a total profit of 89.407 billion yuan, an average of 173.49 yuan per ton of steel, and a 2.8% profit in sales. The consolidated steel output of the Baosteel Group's financial statements was 37.937 million tons, with a total profit of 23.61851 billion yuan and an average profit of 637.68 yuan per ton of steel. If Baosteel were to withdraw from the average per-ton steel of other companies, it only achieved a profit of 137.54 yuan. In 2010, the total investment income of steel association members with financial statements was 1,121,761 million yuan, and after deducting investment income, the average profit per ton of steel members was 149.98 yuan.

According to the "China Steel Industry Business Climate Index Report" released by the Economic Daily on January 25, 2011, the average sales revenue for the fourth quarter of 2010 was based on statistics of nearly 7,500 companies in the ferrous metal smelting and rolling processing industry above the scale of the National Bureau of Statistics. The profit rate is 2.8%, which is the lowest level in the industry in the country. According to the report of the "China Equipment Manufacturing Industry Climate Index" published by the newspaper, the profit margin of China's equipment manufacturing industry in the fourth quarter of 2010 was 7.2%, which is 0.6% higher than the average profit rate of industrial enterprises. According to the data released by other economic climate reports released by the Economic Daily, the cement industry has a sales margin of 7.83%, household appliances industry 4.7%, textile industry 5.2% (including apparel 5.8%), chemical fiber industry 8.2%, petroleum and coal industries Above 10%. According to statistics of the Automobile Industry Association, from January to October of 2010, 17 key enterprises (production accounts for about 90% of the industry) had a profit margin of 10.05%. Shipbuilding Association statistics 83 ship companies from January to November 2010, the profit margin of 11.35%.

Taking the average unit price of China's steel import and export in November 2010 as an example, the import of steel was 1,384,700 tons, with an average CIF price of 1,263 US$/t; China's steel exports were 2,905,300 tons, with an average FOB price of US$1,012/t. Among them, the import of special thick plate average CIF $ 1473 / t, export special thick plate average FOB price of $ 820 / t; imported galvanized sheet 977 US dollars / t, exports 810 US dollars / t; imported seamless steel pipe 3943 US dollars / t, exports 1302 US dollars / t; imported hot rolled bars 1962 US dollars / t, exports 844 US dollars / t. It can be seen that China's steel products show differences in the varieties and quality levels of imports and exports. In November 2010, Japan exported a steel 3.07 million tons (excluding semi-finished products), with an average export price of 1193.45 US dollars per ton. Japan exports 20% of special steel including stainless steel, while China only accounts for 4%.

In 2010, Baosteel Co., Ltd. sold 26,324,800 tons of steel and averaged tons of material sales revenue of 587,380.03 million yuan. Wuhan Iron and Steel Co., Ltd. sold steel 13.6849 million tons, average tons of material sales revenue 4,868.7 yuan; Anshan Iron and Steel Co., Ltd. sold 20,629,900 tons of steel, average tons of material sales revenue 4288.15 Yuan; Hebei Tangshan Steel sells 7.542 million tons of steel, average tons of material sales income of 3706.6 yuan; Tangshan Guofeng sells steel 7,476,800 tons, average tons of material sales revenue of 3664.7 yuan; Jiangxi Pingxiang sells steel 6,481,700 tons, average tons of material sales revenue 3601.73 yuan. The same iron ore concentrate was used to smelt born iron, but there was a big difference in the final value of the steel produced.

China's steel associations have the highest average profit rate of sales revenues in 7.3% in 2007. The average CIF price of imported iron ore was US$88.21/t. In 2010, the average CIF price of imported iron ore was US$128.38/t, compared to 2007. The average price is 40.17 U.S. dollars/t, an increase of 45.53%. Calculated according to the imported iron ore of 618.64 million tons in 2010, China's steel industry spends 24.48 billion U.S. dollars more, calculated according to the average exchange rate of 6.768 against the U.S. dollar in 2010. 168.19 billion yuan.

To achieve four transformations and promote China's steel industry from big to strong, is the consensus of the entire industry, and is a summary of the practical experience of iron and steel enterprises at home and abroad to improve their competitiveness. The task before us now is how to solve the problem of speeding up the transition.

II. Learning from Baosteel, Making the Company Better and Stronger In the first half of 2010, Baosteel's operating performance ranked among the top steel companies in the world. Baosteel was put into operation in September 1985 and has already gone through 25 years. For 25 years, Baosteel has always followed the teaching of Comrade Deng Xiaoping's “Mastering new technologies to be good at learning, but also to be good at innovation”, insisting on scientific development, continuous innovation, advancing with the times, striving for excellence, and always standing at the forefront of the Chinese steel industry. Leading the development of China's steel industry, it has become a leader in China's steel industry.

As early as the early 1980s, Comrade Deng Xiaoping predicted: "History will prove that the construction of Baosteel is correct." For 25 years, Baosteel has answered with practice. The first is the introduction of advanced technology and management from abroad through the introduction of Baosteel, bringing new ideas, new technologies, and new management methods to China's steel industry, accelerating China's iron and steel industry to catch up with the world advanced level and promote the transformation of old companies, in order to change China Steel. The industrial outlook has shortened the gap with the world advanced level and made outstanding contributions. Second, Baosteel with advanced technology and equipment and continuous technological innovation, invention and creation, and continuous innovation and production of high-quality fine steel products have provided strong support for the development of China's equipment manufacturing industry. The third is to gradually begin the localization of large-scale metallurgical equipment through the digestion and absorption of imported technologies and equipment. Without the introduction, digestion, and innovation of technology introduced by Baosteel, China will not be able to independently design, manufacture, and modernize large-scale steel bases today.