[Ferro-Alloys.com] 

  Coronavirus pandemic was rampant in the world in 2020, and the global industrial and supply chain were hit hard. As the basic industry of the national economy, China's iron and steel industry has withstood the test of the epidemic, taken on the important tasks of ensuring supply, stabilizing employment and promoting development, and become the backbone of supporting the domestic economic recovery. In 2020, China's crude steel output will reach 1.053 billion tons, with a year-on-year growth of 5.2%. It is estimated that the steel consumption will reach 981 million tons, with a year-on-year growth of 9.6%, and an increase of 86 million tons, both of which will reach a record high. Is the rapid growth of steel consumption and release of steel production capacity sustainable? It needs to be analyzed carefully, treated rationally and dealt with scientifically.

  Analysis of China's steel consumption growth in 2020 and consumption forecast in 2021

  In 2020, under the action of a series of policies to promote investment and steady growth, such as the national active fiscal policy and prudent monetary policy, the construction of "two new and one heavy" areas will make great efforts, and the investment in infrastructure and real estate will maintain a rapid growth. At the same time, the rapid growth of the export of mechanical and electrical products will drive the indirect export of steel to increase, and drive the steel consumption of China's construction, machinery, energy and other industries to maintain a good growth. The overall consumption of steel will increase rapidly. It is estimated that China's steel consumption will reach 981 million tons in 2020, with a year-on-year growth of 9.6% and an increase of 86 million tons.

  In terms of growth, the construction industry is the main driving force for China's steel consumption to reach a record high. It is estimated that the steel consumption of the construction industry will reach 574 million tons in 2020, driving the steel consumption to increase by 68 million tons year-on-year, with a growth rate of 13.4%; the steel consumption of the machinery and energy industries will maintain growth, with the steel consumption expected to reach 158 million tons and 38 million tons respectively, with a year-on-year growth rate of 2.1% and 4.2%.

  From the perspective of growth regions, the growth of steel consumption in the eastern region is relatively large, especially the GDP growth of Jiangsu, Zhejiang, Shandong and other provinces with large steel consumption is higher than the national average. Among them, the GDP growth rate of Jiangsu Province in the first three quarters of 2020 reached 2.5%, which is the fastest growing province in the eastern region; from January to November 2020, the growth rate of fixed asset investment in Zhejiang, Shandong, Guangdong and other provinces was higher than the national average, reaching 5.2%, 3.4% and 6.8%, respectively. The traditional steel consumption in the eastern region is large, and the economic growth drives the steel consumption, which is the main region of steel consumption growth. Driven by the rapid growth of GDP and fixed asset investment, the western region is the fastest growing region of steel consumption in China.

  Viewing the rapid growth of steel consumption objectively

  In 2020, China's steel consumption will grow against the trend of global demand decline, which not only reflects the achievements of the CPC Central Committee in correctly coping with the epidemic crisis and promoting the epidemic prevention and control and economic and social development as a whole, but also reflects the remarkable effect of the supply side structural reform of China's steel industry, the substantial improvement of the comprehensive competitiveness of the industry and the significant enhancement of the ability to resist risks. But at the same time, we should also be aware that the growth of steel consumption in 2020 is "unconventional", which is very similar to the high growth of steel consumption driven by investment in 2009. We should calmly look at the impact of the current high growth of steel consumption on the high-quality development of the steel industry.

  Firstly, it may lead to overheated investment in the steel industry. Secondly, it may lead to a new round of imbalance between supply and demand. Thirdly, it may increase the difficulty of achieving carbon emission reduction targets. Fourthly, it may increase the difficulty of resource guarantee.

  Scientific response to unconventional rapid growth of steel consumption

  Scientific response to the unconventional rapid growth of steel consumption requires historical materialism thinking and strategic and systematic vision. The whole industry should deeply grasp the new characteristics and requirements of the new development stage and new development pattern, coordinate the epidemic crisis response and high-quality development strategy, deepen the supply side structural reform, pay attention to the demand side management, strive to solve the pain points of iron ore resources and other industries, plan the layout of low-carbon development in advance, and jointly promote the upgrading and high-quality application of iron and steel basic materials, to form a higher level of dynamic balance between supply and demand.

  From the industry level, there are five suggestions. One is to control the excessive growth of crude steel output. Second, continue to promote merger and reorganization. Third, guide green consumption. Fourth, the layout of low-carbon development. Fifth, strengthen the guarantee of resources.

  From the perspective of enterprises, there are four suggestions. Firstly, enhance competitiveness in an all-round way. Secondly, rationally arrange investment and production. Thirdly, plan ahead of time for carbon reduction and carbon trading. Fourthly, create and lead market demand.

• [Editor:Catherine Ren]