After the founding of the People's Republic of China in 1949, due to historical reasons, China has been in a state of steel shortage for a long time. It is precisely because of this that the steelmaking movement in the late 1950s was the only way for the country to strictly control the use of steel, vigorously promote the policy of saving steel and planning steel, and do everything possible to “use good steel in the bladeâ€. on". It was not until the reform and opening up that China gradually changed the state of steel shortage, especially after China's steel output exceeded 100 million tons in 1996, ranking first in the world. Since then, China's "world's number one steel power" has become increasingly consolidated. In 2010, China's steel output has exceeded 600 million tons, accounting for almost half of the world's steel production. For China, the era of saving steel, restricting steel, and planning steel is gone forever. The problem is how to digest steel. What makes Chinese steel producers embarrassed is that the profits of steel producers can only be described as meager compared to the rapid growth of steel production. The reason is that iron ore has become the sword of Damocles hanging over the Chinese steel companies.
Iron ore negotiations have always been in the past few years, iron ore pricing negotiations gradually began to affect the hearts of Chinese people, for no reason, the rise and fall of iron ore prices directly affect the price of steel, which in turn affects many related to steel Industries, such as real estate, automobile manufacturing, shipbuilding, etc. However, on the one hand, the world's iron ore resources are mainly in the hands of the “three major mines†(Brazil Vale, Rio Tinto and BHP Billiton); on the other hand, China's demand for iron ore is high. No, China has been in a passive position in iron ore negotiations. As for the espionage case triggered by iron ore negotiations, the importance of negotiations can only be explained from another perspective. Today, the long-term price agreement mechanism has long been old, and quarterly pricing has not yet been formally implemented, and it is nearing death. Spot pricing (prices fluctuate with the market) is becoming a reality. For Chinese steel companies, if they do not change the status quo of spot pricing, then the profits of enterprises will be further reduced, and Chinese steel companies are likely to be arbitrarily crushed by the “three major minesâ€. So, where should Chinese steel companies go? First, China must concentrate on the right to speak in iron ore negotiations, as in developed countries. No matter how many steel companies in China, regardless of the nature of Chinese steel companies, they must unify the negotiation. Although China's situation is now passive, the right to speak is a prerequisite for getting out of the difficult situation of negotiations. Secondly, China's iron and steel enterprises must "walk on two legs". On the one hand, they will continue to negotiate to reduce the purchase price of iron ore; on the other hand, efforts will be made to broaden the source of iron ore and speed up the pace of "going out" to find mines. The most important thing is that Chinese steel companies should work together to avoid being broken.
Extending the steel industry chain to enhance its own hematopoietic capacity China's steel companies have low profit levels, on the one hand because iron ore costs are higher than one year a year, and now even January is higher than January; on the other hand, because Chinese steel companies are now A significant portion of the products produced are low value-added wires. In fact, Chinese steel companies can learn from the experience of Western developed countries. For example, Australian steel giant Bosger Steel has a company specializing in the production and installation of steel structure systems such as Bosger Butler, which extends the industrial chain and strengthens the company. Profitability. We are delighted to see that Baosteel, the leader of China's steel industry, has stepped out of the first step of extending the industrial chain. Baosteel Building System Integration Co., Ltd. was established in July 2011. According to the relevant person in charge of the company, the company will focus on the research and design of industrialized steel structure civil building structural system, assembly maintenance system, and specialized construction methods. Work, promote the general contractor industry model with design, procurement and construction management as the core, and provide a complete set of steel structure civil construction products for the market. We believe that Baosteel has a model and leading role in China's steel industry, and will certainly lead other steel companies to actively expand their business areas, enhance their own hematopoietic function, and enhance their profitability. After all, relying on cost reduction to increase the company's revenue is far less profitable through product upgrades.
Continue to import iron ore to increase national strategic reserves. From the current situation, China will not change the status of iron ore importing countries for a long period of time. Therefore, China's steel companies must stabilize the cost of iron ore as much as possible. At the same time, considering that iron ore is a non-renewable resource, China must make preparations for the repeated use of steel in advance. In addition, steel resources must be reserved from now on. At present, 46% of the steel in the United States is reused, but the proportion of steel structures in the United States has reached more than 40%, while in China it is less than 10%. The gap between them is obvious. A large number of steel structures give the United States a wealth of reusable steel resources. In contrast, most of the buildings in China are difficult to recycle reinforced concrete buildings, even brick-concrete buildings, which can only produce a large amount of construction waste after being demolished. In order to allow our future generations to have more available steel resources, it is time to promote steel construction in order to increase the country's strategic reserves. For steel companies, the steel required for steel construction is a high-end product that can bring greater economic benefits to enterprises. Therefore, whether it is from the perspective of the country or from the perspective of enterprise development, the promotion of steel structure construction has nothing to lose. Iron ore is now a seller's market and will remain a seller's market for a long time to come. For Chinese steel companies, it is unrealistic to get rid of restrictions quickly. Therefore, Chinese steel companies must take a path suitable for their own development and minimize the impact of iron ore on their own development, which is possible.
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