How to Break through the "Ultra-profit Times" of Steel Consumption

In this challenging year for the Chinese steel industry, a mix of high production, high costs, low growth, and low efficiency has created a tough environment. The sector is struggling under a two-way squeeze, with steel consumption growth hitting its lowest point since the new century. The era of easy profits is over, and the industry now faces the pressing question: how to move forward in an era of low profitability? The increase in steel consumption has been the slowest in over a decade. According to the China Steel Association, steel production growth has dropped to between 2% and 3%, while apparent consumption has reached its lowest level since the 2000s. Industry experts suggest that even if macroeconomic indicators show signs of improvement, the actual impact on the steel sector remains uncertain. Many institutions predict that next year’s steel production and consumption growth will still hover around 2% to 3%. Faced with this “low-growth” environment, companies are looking for new ways to break through. A senior executive from Baosteel Group Metal Company emphasized the need to actively seek out market opportunities rather than relying on past success. As Chairman Jia Shulin stated, in the era of meager profits, steel companies must “guide demand and develop new uses for steel.” An example of this strategy can be seen in Baosteel’s tinplate project. Initially designed as simple tinplate, the product evolved into steel two-piece cans due to changing market demands. Today, the steel used is thinner and more efficient, and Baosteel has become a leader in this emerging segment, creating a new brand and industry in China. Despite the “cold winter” in the steel industry, investment remains high. According to data from the China Iron and Steel Association, fixed asset investment in the sector is still at a record level. In the first ten months of this year alone, domestic steel companies invested 414.27 billion yuan—surpassing last year’s total. Non-state-owned enterprises saw a 46% increase in investment, while state-owned firms experienced a decline of over 10%. Analysts warn that continued high investment in an industry already suffering from overcapacity could worsen the situation. They urge steel companies to not only look outward but also think strategically, carefully analyzing both upstream and downstream trends. The future of the steel industry is far from bleak. The head of the China Iron and Steel Association stressed that steel is not a declining industry. New industrialization, urbanization, and technological innovation provide fresh opportunities. At the same time, the sector must undergo structural adjustments and prepare for long-term challenges. Traditional industries like steel are set to meet with emerging sectors. For instance, Baosteel has successfully commercialized fuel ethanol production using exhaust from steel mills, positioning itself as a global leader in low-carbon strategies. Moreover, China's steel companies are expanding internationally, seeking to rationally allocate capital, technology, and resources across the globe. This “going out” strategy is complex, involving political, economic, and cultural factors. Industry insiders stress the importance of careful planning and strategic thinking to build long-term competitive advantages.

Outdoor Wall Sconce

Outdoor Wall Sconce,Outdoor Lamp Wall Sconce,Outdoor Wall Lantern,Modern Outdoor Wall Lamp

Zhengdong Lighting Co., Ltd. , https://www.sundint.com