Beijing, January 14 (Reuters) - Steel Association executives said on Monday that China's steel industry will shift its focus to optimizing production capacity, including products, locations and ownership, in 2019 to reduce overall capacity.
China is entering the fourth year of supply reform to promote its booming heavy industry and pursue "high-quality development" from "rapid development."
Since 2016, the world's largest steel producer has eliminated nearly 300 million tons of outdated steel capacity and low grade steel capacity, but still has about 890 million tons of steel capacity. “(China’s steel industry) is far from completing the supply-side reform task,” Yu Yong, chairman of the China Iron and Steel Association, said at the annual industry conference. “The main activities in 2019 will be to optimize the production structure, adjust the layout of steel mills, promote and acquire.” But he also acknowledges that the pressure of illegally increasing production capacity and oversupply of new projects is still due to the high profit margins of forestry. “The main source of China’s economic growth is investment and consumption, which has led to a decline in steel demand and an increase in product quality requirements,” Yu said. The government consultancy company China Metallurgical Industry Planning and Research Institute predicted last month that due to reduced demand in the real estate, automotive and energy industries, steel consumption in 2019 will drop from 820 million tons in 2018 to 800 million tons. China’s car sales fell by 2.8% in 2018 from the previous year, the first annual decline in 28 years. Yu also called on steel mills to prepare for further Sino-US trade frictions and pay close attention to the indirect effects on Chinese steel exports. According to data released by the General Administration of Customs on Monday, total steel exports fell to 69.94 million tons last year, the lowest level since 2013.
It can be seen that while the steel industry in China is developing rapidly, it has gradually shifted from the initial heavy quantity to the heavy quality, and high quality as the first driving force for industrial development. In this context, Dalian Guangtong Steel Structure Co., Ltd. also actively responded to the national call for improving the structure of steel production capacity, placing quality at the forefront of enterprise production. Quality is the most fundamental guarantee for the survival and development of an enterprise, and it is also the lifeline for entering the market. The quality of the product determines the life of the product, and even the fate of the company's development. Guangtong Steel has a strong "quality", and has maintained the quality concept of exporting the first dam of the product, and the quality of each process is the life of the enterprise. On the one hand, it starts from the manufacturing and strictly controls the quality of the product; The company attaches great importance to employee training, enhances the "quality" awareness of personnel, and practices the same frequency and quality of service. In this context, Guangtong Steel will create more space with high-quality development, and the prospects will be immeasurable.