Coping strategies of steel industry under the new international situation

In 2018, against the backdrop of stable domestic economic growth, structural adjustment and transformation, the domestic economy has gradually withstood the risks from all parties. With the supply-side structural reform as the main line, the domestic economy has steadily stabilized and the recovery momentum has been accumulating, providing a good market demand environment for the domestic steel industry like cold-formed hollow sections. However, international trade frictions occur frequently under the situation and the external demand environment is expected to become weak. Steel export situation in China is also facing a severe challenge.

According to data released by the customs, China’s steel exports in 2018 totaled 69.3336 million tons, down 8.1 percent year-on-year. In the new form of international trade, China’s steel industry needs to speed up the “go global”. According to the previous focus, the growth of demand scale will gradually shift to the change of demand structure and competitive strategy is bound to face a number of adjustments. The steel industry should continue to deepen its own reform and accelerate the merger and reorganization of steel pipe companies. In the next step, the iron and steel industry should speed up the market-oriented merger and reorganization of enterprises to form a number of super-large enterprise groups with strong competitiveness worldwide.

In terms of products, the steel industry should accelerate the transformation and upgrading of products to the middle and high-end, and cultivate new growth drivers. In October last year, the ministry of industry and information technology issued a three-year action plan on improving the quality of raw materials such as pipe black steel, which proposed that by 2020 and China’s steel industry should make positive progress in the research. Domestic steel enterprises should accelerate independent research ,increase the high value-added steel products with international competitiveness, and cultivate new business growth points in the market of high-end products. From the perspective of layout, China’s steel industry urgently needs to explore new markets and develop a more diversified export strategy. China’s steel products like rectangular hollow section are facing increasingly fierce competition. At present, relying on the development trend of “One Belt And One Road” construction strategy, it can not only drive the development of infrastructure construction in countries along the belt and road, but also open up new markets for China’s steel industry. At the same time, China’s steel exports to South America and Africa have also increased significantly. For example, China’s exports to Kenya, Algeria and Tanzania increased by more than 30%, and its exports to Ecuador, Peru and Guatemala exceeded 40%.