Luo Tiejun: "No Concessions, No Sanctions" to Maintain the Continuity of Iron and Steel Industry Policy

On May 28-29, the 8th Shanghai Derivatives Market Forum sponsored by the Shanghai Stock Exchange was held in Shanghai. The theme of this forum was “The ** Market in Economic Recovery and Turbulence: Function Play and Risks. management". Mysteel was invited to attend the meeting.
At the meeting on the 29th, Luo Tiejun, deputy director of the Department of Raw Materials Industry of the Ministry of Industry and Information Technology, expressed his view that after 2009, the steel industry entered a meager profit cycle, but the production performance between steel companies opened a wide gap.
According to reports, in 2010 China's large and medium-sized steel companies realized a profit of 90 billion yuan, of which the top 20 steel companies accounted for 83%, and Baosteel alone accounted for 26%. In the meager profit cycle of the steel industry, “the superior and strong enterprises represented by Baosteel still have certain profits, but many companies have fluctuate within the context of low profit and breakeven.”
It can be seen that the mechanism that the market has forced the steel industry has already taken shape. "The market can force the steel industry to speed up structural adjustments, and through 3-5 years of adjustment, it will come up with a way to transform economic development."
Therefore, the state's macro-control will reduce the micro-control, "guarantee the continuity and stability of the policy, and create a favorable environment for the adjustment of the steel industry market."
"Regulation requires heavy structure and light weight. It should also pay attention to how the regional structure is balanced in terms of structure; light product structure, because product structure is the enterprise's own business, and product structure adjustments are handed over to enterprises."
"Now there is no steel preferential policy. You lose again. The country does not have a policy to pull the steel industry. We do not have a sanctions policy to restrict the steel industry."
The layout of the iron and steel industry has basically formed the prohibition of expansion of steel mills by the name of relocation. In addition, Luo Tiejun also stated in the meeting that only the two chess pieces of the Zhanjiang project of Baosteel and the Fangchenggang project of Wuhan Iron and Steel will be settled, and the layout of the steel industry will basically be formed. Just some fine-tuning.
Luo Tiejun said that the coastal steel bases are indeed to be developed, but “cannot be simply transferred to the coast”; the iron and steel industry in the west is the focus of development, but the layout of the steel industry “cannot be disorderly”. For example, the recent investment in steel in Xinjiang appears to be overheating. “Now many entrepreneurs go to dry steel in Xinjiang and let Xinjiang’s own comrades worry.”
“The relocation of steel mills must be orderly. Steel mills that are incompatible with the local area can consider the transition and relocation is the second.”
“Even if a steel plant is to be relocated, it must integrate the city’s overall functional status and development plan, and it must consider the willingness of the steel mills. The relocation model like Shougang is difficult to duplicate. If other steel mills are to be relocated, they may consider relocating. To a distance not exceeding 100 kilometers."
In addition, Luo Tiejun also said that steel mills are prohibited from expanding their production capacity in the name of relocation.