Upstream of steel industry

Promoting ability of the industrial chain, supply chain of welded steel pipe, iron, manganese, chromium will markedly enhance its capability of mineral resources, including iron metal domestic rate reached more than 45%, an annual output of 300 million tons of scrap steel resources to domestic, make one or two with global influence and the market competitiveness of rights and interests of overseas iron ore mine, the rights and interests of overseas iron ore accounted for more than 20% of the total imports of ore.

We will encourage competitive enterprises in steel, transportation, energy and finance to form consortia, speed up the construction of oversize iron ore projects in West Africa and Western Australia, and strengthen cooperation on iron ore resources with neighboring countries such as Russia, Myanmar, Kazakhstan and Mongolia. We will promote the development and utilization of alloy and compound gold resources in Southeast Asia, Central Asia, Africa and other regions, and develop effective supply capacity of cold rolled steel pipe as soon as possible.

In recent years, on the other hand, as the imported iron ore prices and sustained downturn, China’s iron ore for its low grade, selecting the high cost, less competitive, small profits or even losses, the domestic iron ore, ore production decline year by year, by the high of 1.514 billion tons in 2014 fell to 2017 tons in 763 million, with nearly two years of iron ore price rise, As well as the reduction of tax burden on mining enterprises, domestic iron ore production has recovered. In 2020, China produced 867 million tons of raw iron ore, up 3.7 percent year on year.

In recent years, the matching degree of ferrous metal mining industry, ferrous metal smelting and rolling industry has deteriorated. In recent years, domestic mining investment and steel industry development gap widening. Since 2015, the cumulative year-on-year growth rate of the fixed investment of ferrous metal mining and processing industry has been lower than that of ferrous metal smelting and rolling processing industry. Especially in 2020, the cumulative year-on-year growth rate of the fixed investment of ferrous metal mining and processing industry was -10.3%, while the year-on-year growth rate of the fixed investment of ferrous metal smelting and rolling processing industry of mild steel tube was 26.5%, and the gap between them reached a record high. That’s 36.8 percent.
In order to improve the situation of large amount of imported iron ore, high price and high dependence on foreign countries, in addition to increasing the application of scrap steel at home and abroad, it is imperative to increase the domestic mine development support. It is necessary to give full support from exploration, technology, equipment, talent reserve, tax burden, industrial planning and other aspects such as China steel tube manufacturer, increase investment in domestic mining development, so as to improve the matching degree with the development of the steel industry.