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.