"China's steel industry, with its strong strength, has become a key force driving the world's steel technology progress." Although we are in a special period of development and face many difficulties and challenges, with our own capabilities and a huge consumer market, we are fully capable of overcoming difficulties and jointly embracing a new era of steel development." On November 25, the 19th China Steel Industry Chain Market Summit was held in Beijing, and He Wenbo, Party secretary and executive chairman of China Iron and Steel Industry Association, delivered a keynote speech entitled "Considering the situation and System Planning to effectively Promote the transformation and upgrading of the steel industry and high-quality development", sharing his thoughts on the future transformation of the steel industry.

The picture shows He Wenbo

China's steel industry should make positive efforts to take the road of carbon neutrality

In his speech, He Wenbo first introduced the five work that China's steel industry is accelerating in terms of green and low-carbon:

First, ultra-low emissions. "Our environmental standards are already among the best in the world, and environmental technical and economic assessments are ongoing." "We won the blue sky battle, and then we have to win the market battle," Mr. He said. The second is extreme energy efficiency. He Wenbo said that low-carbon development should start from the foundation and start from the data. Since its official launch in December last year, the extreme energy efficiency work has been progressing smoothly, and more and more enterprises have entered the ranks of energy efficiency standards. The third is to launch the work plan for the revision and upgrading of China's steel carbon neutral vision and technology roadmap, including the deployment and implementation of breakthrough cutting-edge low-carbon technologies, to keep pace with the green development of steel in the world. The fourth is to improve the environmental product declaration (EPD) platform of the steel industry, achieve the effective accumulation and openness of environmental data of the industry, and actively promote international mutual recognition. Fifth, accelerate the research process of low-carbon emission steel standards, and play China's role in the process of green development of steel in the world.

He Wenbo believes that the three forces from "government requirements, standard constraints and user orientation" have prompted the steel industry to accelerate the development of green steel (low carbon emission steel or near-zero carbon steel) in the green transformation. To be specific, the first is the request of governments, including China and other governments and international organizations; The second is the standard constraint, including all kinds of newly created and emerging new standards; The third is user-oriented, from some leading industries and leading enterprises at home and abroad. "The steel industry is the main force for China's economy and society to achieve comprehensive green transformation, and China's steel industry should actively pursue the road of carbon neutrality." He Wenbo said.

China's steel development environment faces three challenges

He Wenbo introduced that the current development environment of China's steel industry faces at least three challenges:

First, the market pressure, the market environment has changed. He Wenbo said that the steel industry in developed countries has gone through such a stage decades ago, has basically adapted, and our way of thinking has not really jumped out of the environment of continuous expansion of the market, coupled with the concentration of China's steel industry is still significantly low, this "soft and hard" two significant defects on the efficient operation and high-quality development of China's steel industry has formed constraints.

Second, environmental pressure, environmental requirements have changed. "The global steel industry, including China, is vigorously promoting low-carbon transformation, but China's steel industry is implementing the dual tasks of reducing pollution and carbon simultaneously." He Wenbo said.

The third is cost pressure, the basis of competition has changed. He Wenbo believes: "Although China's steel through continuous reform and transformation continue to improve efficiency and improve costs, but the gradual increase in labor costs and environmental costs is an inevitable trend, the era of relying on costs to win the world has passed."

Faced with challenges, innovation is the only way to go. "So we say, innovation is not easy, but there is no alternative. And it requires not only technological innovation and management innovation, but also institutional innovation and governance innovation, which is a challenge for business management and industrial governance of the government." He Wenbo stressed.

"Although facing the above challenges, China's huge market base and the upgrading of demand in new downstream areas and the comprehensive improvement of the environment have provided a new development foundation for the development of steel, as well as the talent group accumulated in the long-term rapid development of the steel industry, which is a solid foundation and reliable guarantee for us to overcome difficulties and cope with challenges." He Wenbo said.

The transformation of the steel industry is essentially a green transformation

"The 'three processes' of urbanization, marketization and internationalization have achieved the world status of China's steel industry, and the two constraints of resources and environment have forced the rapid transformation of China's steel industry." He Wenbo shared his three insights on the overall transformation of China's steel industry.

First, the transformation of the steel industry is essentially a green transformation. "This is determined by the fundamental role of the steel industry in the national economic system and the high-load energy characteristics of the industry itself." He Wenbo said, "The green low-carbon steel through and cover the whole process, the whole industry, everywhere in the use of steel, if the steel is not transformed, the entire industrial system is difficult to achieve green low-carbon."

Second, the fundamental question of green low-carbon transformation is at what cost to achieve the transformation goal. "The degree to which steel is carbon neutral is also determined by the cost tolerance. Various low-carbon technologies are constantly being developed, whether they have vitality and whether they are accepted by the industry depends on the balance between technical possibility and economic feasibility. How to achieve the green transformation of the steel industry under the premise of effectively fulfilling the industrial mission and continuously maintaining and enhancing the industrial competitiveness is a major issue we must face." He Wenbo said.

Third, the green transformation of the steel industry is a systematic project, a social project, not only the steel industry itself. He Wenbo proposed that on the basis of the existing policy framework, a package of overall transformation plans that can fully support industrial transformation and effectively support the realization of national climate goals should be planned.

It is necessary to correctly understand and handle the eight relationships of steel layout

In order to cope with the future complex situation, He Wenbo proposed that it is necessary to correctly understand and deal with the eight relationships of steel layout. These eight relationships can be briefly summarized as "more and less, big and small; In and out, inside and out; Sea and land, long and short; The relationship between country and people, iron and carbon.

"More and less" refers to the more and less production capacity relative to demand, and studies the most basic supply and demand relationship in the market economy, discussing production and consumption, supply and demand. The frequently mentioned problem is how to deal with "overcapacity" and the goal of pursuing "supply and demand balance". In the long cycle of rapid growth and continuous expansion of steel demand, China's steel has strongly supported the rapid development of China's economy with its strong and rich production capacity. With the increasing maturity of the national economic system and the changes in the industrial structure and consumption structure, the trend of continuous growth of the total social steel consumption has changed periodically. The main contradiction in the industry has shifted to how to meet the limited steel demand with sufficient steel production capacity. There are many ways to solve the imbalance between supply and demand, and both governments and enterprises can make a difference, but the experience of the steel industry in developed countries over the decades shows that this will be a difficult process and a historical stage that must be passed, and we must have a clear understanding of this. He Wenbo said that our current task is to do our best to create a "new mechanism for production capacity management", give play to the institutional advantages of China's socialist market economy, and adapt to this historic change in supply and demand in as short a time as possible.

He Wenbo further explained that the new mechanism of production capacity governance we are talking about is: the gradual formation of both environmental, energy efficiency, carbon emission policy constraints, industry self-discipline, government supervision, in line with the law of the market, conducive to the transformation and upgrading of oriented industries and the survival of the fittest, guaranteed, flexible supply and demand balance adjustment of the new mechanism.

"Big and small" refers to the size of the enterprise relative to the size of the market, the study is the degree and way of industrial concentration on the market order and fair competition, fair trade. He Wenbo said that it is clear that China's steel is still in a state of excessive dispersion and industrial concentration is obviously low, and further measures need to be taken to vigorously promote the joint reorganization of enterprises, which is the key to all problems. Therefore, "Creating a new mechanism for capacity governance" and "optimizing new policies for joint restructuring" are listed by the association as the two basic initiatives for the steel industry to span the market cycle.

"In and out." "In and out." "These two relations are closely related issues, two sides of the same problem of internationalization and globalization, which mainly study the investment and trade policies of countries and the international business behavior of enterprises." He Wenbo specifically mentioned that due to the previously mentioned resource constraints and environmental constraints, China's steel does not have the conditions to maintain a high proportion of exports, but must encourage and support the export of high value-added products, steel enterprises must be encouraged to develop long-term cooperative relations with downstream leading enterprises on a global scale, which is an important source of power for enterprises to continue to maintain technological innovation.

He Wenbo believes that there are three driving forces for product exports, one is market-driven, the second is supply chain driven, and the third is industrial investment driven. The market drive is mainly price driven, while the investment drive depends on the investment intensity of the steel and downstream industries in the countries where they are invested. The export of high value-added products highlighted above currently mainly refers to the export of products driven by the supply chain. In recent years, the product structure of China's steel exports has been continuously optimized, reflecting the results of the overall technological progress of the steel industry, but the international market competition is fierce, various tariff and non-tariff barriers and trade discrimination are increasingly common, and it is crucial to strive for and create a fair competitive environment for Chinese enterprises.

In his speech, He Wenbo also talked about how to implement the key work idea of "continuously promoting the internationalization process of China's steel" proposed by the industry and the work arrangement for next year, and combined with various problems and suggestions put forward in the recent exchanges and communication between the association's leaders and various international organizations, and put forward relevant suggestions on the principles of overseas green steel investment.

"Sea and land," "long and short." He Wenbo said: "These two topics study the spatial layout and process layout of the steel industry, discussing the layout of steel in the coast and inland, and the layout of long and short processes."

He Wenbo revealed that as of now, the steel production capacity within 100 kilometers near the coastline has reached 380 million tons, and with the production of some projects under construction, the coastal steel production capacity will reach 400 million tons. According to the requirements of the coastal steel layout issued by the national ministries and commissions, we believe that the purpose of adjusting the layout of the coastal steel production base has been achieved and the task has been completed. He Wenbo believes that with the development and utilization of inland resources and renewable energy more and more attention, according to the perspective of "economic, ecological, and safety three-dimensional dynamic assessment", the value of some inland steel should also be re-recognized.

At present, the short process production capacity of electric furnaces accounts for 16.7%, and the actual crude steel output in 2022 accounts for 9.5%, indicating that the actual input rate of electric furnaces production capacity is low, and the Ministry of Industry and Information Technology and the Steel Association have further promoted the application of short process as a key work topic. He also mentioned in particular that the current concept of long process and short process can not fully cover the layout of the process of steel, including hydrogen reduction, including some new low-carbon processes have been developed, iron and steel processes have brought different combinations of new changes in the process, it is necessary to pay attention to the new development of such third processes.

"Nation and people," "Iron and carbon." "State and people" refers to the proportion and combination form of state-owned capital and private capital in the steel industry, that is, the capital layout problem in the steel field. "This is not a problem unique to the steel industry, is beyond steel issues, here will not be discussed in detail, but the capital layout and spatial layout, process layout, is an important part of the layout of the steel industry." He Wenbo went on to say that "iron and carbon" is not an independent issue, but is almost related to the above issues, and can be divided into broad "iron and carbon" and narrow "iron and carbon".

He further explained that the broad definition of "iron and carbon" refers to how to deal with the relationship between steel production and carbon reduction. "This is also an important issue that has attracted more and more attention and weight in the development and planning of steel in recent years, and has more and more substantial impact on the long-term development and overall layout of the steel industry." 'he said.

He Wenbo introduced that the narrow "iron and carbon" study is the specific "iron cycle" and "carbon cycle". In particular, he spoke of rethinking the "carbon cycle". Everyone is relatively familiar with the iron cycle, but the understanding of the carbon footprint accompanying the iron cycle is far from enough, as the new low-carbon process is gradually clear, the acquisition and supply of iron resources and its product form, including steel and mining industry boundaries will change. The "Cornerstone Plan Upgrade" proposed by the Association is mainly to propose an updated version of iron resource solutions in response to this new change. In this sense, the "Cornerstone Plan" is not only a resource guarantee plan, but also an industrial chain cooperation plan, and a future-oriented green resource development plan.

"In the face of complex economic situation and volatile international situation, we must adhere to systematic thinking, overall planning, complete and accurate comprehensive implementation of the new development concept, look at the direction, maintain strategic focus, and jointly promote the transformation and upgrading of the steel industry and high-quality development." He Wenbo said.