Healthy Development Of The Steel Industry
"At present, the phenomenon of 'involution' at the low end of the steel industry has weakened, and self-discipline in production control and inventory reduction has become an industry consensus. Everyone is working hard to promote high-end transformation." On July 29, Li Jianyu, Secretary of the Party Committee and Chairman of Hunan Iron and Steel Group, shared his observations in an exclusive interview with a reporter from China Metallurgical News, and made three calls for the healthy development of the industry.
First, Adhere To Self-Discipline And Production Control
Statistics from the China Iron and Steel Association show that in the first half of the year, the total profits of key steel enterprises reached 59.2 billion yuan, a year-on-year increase of 63.26%. "Industry operating conditions have improved significantly in the first half of the year, particularly since the official commissioning of the Yaxia Hydropower Project in July. Steel companies are very excited, but we recommend that they exercise strong restraint in their impulse to expand production and maintain self-discipline to prevent the rapid disappearance of current profits," said Li Jianyu.
He frankly stated that the steel industry has basically reached a consensus on "maintaining production control." In particular, production has generally been restrained over the past year, and after the suspension of the "Implementation Measures for Capacity Replacement in the Steel Industry," steel capacity growth has also been restricted. "We hope that the country will continue to implement its crude steel production control policy to safeguard the industry through the period of reduction and adjustment," he said.
Second, Support Traditional Enterprises In Obtaining Green Energy.
Statistics from the China Iron and Steel Association show that as of June 30th, the industry had invested over 300 billion yuan in ultra-low emission improvements. "The steel industry has invested heavily in energy conservation, emission reduction, and carbon reduction, but traditional companies have very limited access to green electricity and other resources, and their ability to build their own, putting them under significant pressure to achieve carbon neutrality. As major electricity consumers, steel companies require supporting policies such as direct green electricity supply," said Li Jianyu.
Third, Be Prepared For Low Price Warnings.
On April 2, 2025, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the "Opinions on Improving the Price Governance Mechanism," specifically mentioning "improving the social price supervision system and establishing a price supervisor system for industry associations." It is reported that the China Iron and Steel Association is considering establishing a price supervisor system to regulate market pricing behavior.
Li Jianyu stated, "I strongly agree with price monitoring, but at the same time, we must also provide early warnings of low prices. Our industry cannot withstand the impact of low prices. If steel prices fall below a certain level, steel companies will be unable to cover all other costs, and they will face a survival crisis. Therefore, price monitoring should be comprehensively considered, which is also necessary for building a healthy black industry ecosystem."
Post time: Aug-01-2025