Steel companies must form a joint force to break the unreasonable iron ore pricing mechanism

On June 24, the tenth member meeting of the China Special Steel Enterprise Association was held in Huangshi, Hubei. Luo Tiejun, vice president of the China Iron and Steel Association, attended the meeting, handed over the flag for the new and old presidents at the rotating president handover ceremony, and delivered a speech on "Building a New Pattern to Meet New Challenges and Promote High-quality Development of the Steel Industry".

Luo Tiejun pointed out that since the beginning of this year, driven by demand, the steel industry has generally operated at a high level, showing the characteristics of high cost, high price, high efficiency, and large fluctuations. In particular, the cost of raw materials such as iron ore, coking coal, and scrap steel has risen sharply. The high steel prices and the large fluctuations in prices have seriously affected the healthy development of the steel industry. At present, downstream demand is showing new changes. The main steel industry generally maintains a growth trend, but the growth rate has slowed down and the month-on-month decline. On the one hand, due to the influence of the rainy season in the south and the high temperature in summer in the country, consumption has entered the annual off-season; on the other hand, there are also objective requirements for consumption to gradually return to normal. This year's steel consumption has shown an overall growth trend, and demand is optimistic.

Luo Tiejun mainly shared and exchanged four issues with the conference representatives on the short-term and long-term relationship of production, the synergy of pollution reduction and carbon reduction, the "stuck neck" product research, and the breaking of the unreasonable iron ore pricing mechanism.

1. In terms of quantity, it is necessary to handle the short-term and long-term relationship

China's steel demand is not determined by the steel industry itself. The increase or decrease in demand is determined by economic development, mainly due to two factors: one is the growth rate of GDP, and the other is the ratio of investment in economic growth. Now there is another new element that is carbon peaking. If the steel industry wants to achieve carbon peaking, it will be difficult to achieve it if the steel output does not reach the peak. In the next five or ten years, China's steel demand will be around 1 billion tons, and there will be some fluctuations in different years. It is normal for such a large demand to fluctuate tens of millions of tons. The "dual carbon" goal will mechanically restrict the impulse to pursue GDP blindly regardless of environmental resources. We hope that China's economic growth rate will be controlled near the potential growth rate, and the economy will be stable and far-reaching. Only in this way can the demand of the steel industry be stable and the carbon peak and carbon neutrality can be achieved.

2. It is necessary to realize the synergy of pollution reduction and carbon reduction as the overall starting point for promoting the green transformation of all aspects of the economy and society

General Secretary Xi Jinping pointed out that it is necessary to realize the synergy of pollution reduction and carbon reduction as the overall starting point for promoting the green transformation of all aspects of economic and social development, and accelerate the adjustment of industrial structure, energy structure, transportation structure, and land use structure. In early June, the Ministry of Ecology and Environment issued the "Letter on Entrusting China Iron and Steel Industry Association to Carry Out Carbon Emissions Trading-related Work in the Iron and Steel Industry", including the formulation and update of carbon allowance schemes for the iron and steel industry, carbon market support system testing, carbon emission monitoring and verification.

Regarding how companies are concerned about how to achieve carbon peaks and how to assess them, Luo Tiejun said: Conceptually, it is necessary to fully understand that China's ecological civilization construction has entered the main strategic direction of carbon reduction, and promote the synergy of pollution reduction and carbon reduction; in action , Regarding the total carbon emissions and proportion of the iron and steel industry, we must cooperate with various national ministries and commissions to carefully study, and the emission reduction rhythm must be carried out in accordance with the unified deployment of the country to ensure that the carbon peak is achieved in 2030, and create conditions to strive to achieve it in advance during the "14th Five-Year Plan" period; On the path, energy saving is mainly energy saving. Generally speaking, energy saving and carbon reduction are in the same line. Enterprises with conditions can try low-carbon smelting; in terms of application, it is necessary to promote the promotion and application of high-strength material-saving steel to reduce the amount of steel used.