On August 14-16, 2020, 16th
Steel Development Strategy Conference, hosted by SteelHome, was
successfully held in Shanghai Tower. Around 800 delegates from
governments, associations, steel mills, miners, traders, research
institutes attended the one of biggest events in China steel industry.
9th International Raw Materials
Supply Chain Summit, 10th Coal & Coke Development Strategy Conference,
8th China Commodities E-Commerce Summit and 2020 SteelHome Summer Report
were simultaneously held.
Yan Wutang, Deputy
General Manager of Hancheng Iron and Steel Co., Ltd, Shaanxi Iron and Steel Group, delivered a speech titled Marketing
Strategies on China's Construction Steel Industry in Steel
Market Situation and Marketing Strategy Panel on August 16, 2020.
Yan Wutang,
Deputy General Manager of Hancheng Iron and Steel Co., Ltd, Shaanxi Iron and Steel Group
Key Points
1.
Results of Supply-Side Reform in China’s Steel Industry
The results
of the supply-side reform in China’s steel industry have benefited the
country’s construction steel industry in the past three years. In 2017,
the price of construction steel reached 5,000 yuan per tonne, bringing
increased profits in steel mills. Therefore, a new round of investments
started in China’s steel industry.
Massive
investment has poured into China’s steel industry after 2018, mainly in
the capacity replacement and environmental protection projects. The
actual steel capacity, however, was not decreased but increased.
2.
Construction Steel’s Supply and Demand in Midwest China
Due to the
high concentration rate of construction steel production in Shaanxi,
Shanxi, Sichuan, Gansu provinces, the fierce competition appeared,
resulting in sharp decreases on local steel prices and the escalating
conflict between supply and demand.
China’s
steel price may fluctuate at high levels in the near term if steelmaking
raw materials’ prices remain high in China.
3.
China’s Steel Industry in New Era
There are 4
main tasks for China’s steel industry to further practice supply-side
reform: (a) ultra-low emissions and capacity transformation; (b) steel
quality grading which includes promoting rebar grading; (c) developing
eco green industrial chain; (d) new layouts of leading steelmakers to be
established in China as accelerating mergers and reorganizations.
4.
Marketing Strategies
First, the
supply chain service system should be project demand-oriented. Under
existing approaches, one should improve its collaboration by using
digital technology in each segment like production, processing, finance
and etc.
Second, one
should seize the opportunity of China’s new infrastructures and the
country’s major strategic planning. Large-scale development in the
China’s western region, for example, is observed as one of the
opportunities for the construction steel industry.
Third, one
should develop reginal coordination, strengthen linkage as well as
interaction with other companies, and avoid unbalanced coordination
which may cause virulent price competition. |