Recognizing the situation and maintaining composure
Jointly maintain the stable and orderly development of the steel industry
China Iron and Steel Industry Association
The steel industry is an important fundamental raw material industry, which is crucial for the healthy and stable development of the national economy. The 20th National Congress of the Communist Party of China proposed to "adhere to the theme of promoting high-quality development, organically combine the implementation of the strategy of expanding domestic demand with deepening supply side structural reform, and promote the effective improvement of quality and reasonable growth of quantity in the economy.". The high-quality development of the steel industry is the unity of quality and quantity, and it is an absolute principle. The national industrial structure determines the consumption structure, the consumption structure determines the variety structure, and the variety structure determines the production structure. Since the Spring Festival, the steel market has rapidly declined, presenting a "three highs and three lows" situation of high production, high cost, high inventory, low demand, low price, and low efficiency. In the short term, the steel market has experienced significant fluctuations, which is not conducive to the orderly and healthy development of the industry. Here, we advocate:
1、 Understand the situation and unify our thinking and understanding. The main driving force behind the recent market downturn is insufficient demand. The real estate market has continued to decline, and the intensity of infrastructure construction has slowed down, resulting in a slow start to downstream demand. The prerequisite for production is consumption, and the core of enterprise operation is profitability. In a market environment where steel supply is stronger than demand, the key to achieving dynamic balance between supply and demand is to fully leverage the role of steel enterprises as market entities. Steel enterprises should take the initiative and follow the self-discipline production method of "meeting user needs and balancing supply and demand" to reduce production intensity.
2、 Concentrate and promote orderly development. Steel enterprises should adhere to the "three fixed and three no" principles of "production based on sales, production based on efficiency, and sales based on immediate results", pursue high-quality operation and efficient development, reduce ineffective supply, and maintain supply-demand balance. Leading enterprises should stand at the height of high-quality development in the industry, take responsibility, set an example, and promote the smooth operation and orderly development of the steel market.
3、 Maintain composure and maintain market stability. In recent times, the steel market has experienced significant fluctuations, with a phenomenon of chasing gains and killing losses, which amplifies the volatility and is not conducive to the stable operation of the steel market. Steel enterprises should rationally view market fluctuations, maintain strategic composure, oppose low price dumping, resist vicious competition, and jointly create a fair and stable market environment; Enhance risk prevention awareness, control sales channels well, strictly prevent low price selling from disrupting market behavior, avoid market trampling, and prevent market fluctuations.
4、 Deepen cooperation and achieve mutual benefit and win-win results. The steel industry belongs to the heavy asset industry, with a long industrial chain and multiple upstream and downstream partners. It is a win-win situation, and the synergy of the industrial chain becomes increasingly important in times of market downturn. Steel enterprises need to strengthen communication and exchange between upstream and downstream, continuously innovate cooperation models, strengthen mutual trust, deepen cooperation, based on the long-term, face the future, form a close community of interests, and achieve mutual benefit and win-win.
5、 Strengthen confidence and plan production and operation. In the process of high-quality development in the steel industry, the total demand has reached its peak and the structure is constantly changing. The government work report of the two sessions proposed to promote stable consumption growth and actively expand effective investment. Recently, the State Council issued the Action Plan for Promoting Large scale Equipment Renewal and Trade in Consumer Goods. With the gradual implementation of the policy, it is expected that downstream demand will gradually be released. The current demand for steel in China is still huge, and what urgently needs to be improved is the industry's ability to adapt to the market. Steel enterprises should conduct rational analysis, accurate judgment, and fully grasp market trends. Based on market changes, they should regulate production pace reasonably, reduce inventory as soon as possible, and achieve dynamic matching of supply and demand.