Transformation and upgrading of the steel industry

The work plan for stabilizing growth in the steel industry has formed efficient policy coordination, accurately matching the core characteristics of concentrated capital demand and large investment in transformation in the industry 1、 Accurately reducing financing costs and enhancing the driving force for enterprise upgrading As a capital intensive industry, the steel industry generally has a high asset liability ratio, and the demand for funds in areas such as green and low-carbon transformation, production equipment updates, and technology research and development continues to be strong. Its sensitivity to interest rate changes is significantly higher than other industries. The reduction in interest rates for structural monetary policy tools this time will directly lower the comprehensive cost of enterprises obtaining funds through special tools, especially providing effective policy and financial support for enterprises carrying out ultra-low emission transformation, low-carbon process research and development, and digital upgrading. 2、 Continuous optimization of financing environment to ensure the supply of transformation funds At present, the steel industry has entered a critical period of green and low-carbon transformation. According to relevant plans, more than 80% of production capacity needs to complete ultra-low emission transformation by the end of 2025. In addition, with the full inclusion of the carbon emission trading market in the industry, the pressure on enterprises to invest in environmental upgrades, low-carbon technology research and development, and other aspects will further increase. The interest rate reduction of the structural monetary policy tool this time will guide financial institutions to increase credit support for key projects in the steel industry through policy guidance. On the one hand, it will alleviate the pain points of difficult and expensive financing for small and medium-sized enterprises. On the other hand, it will provide stable funding for key projects such as industry process upgrading, digital transformation, and low-carbon technology landing, helping the industry efficiently implement the core goal of "expanding effective investment and promoting transformation and upgrading" in the stable growth work plan, and clearing the financial obstacles for the transformation path.

"Five New" Supply and Demand Conference were held

On January 15th, the "15th Five Year Plan" Steel Industry Green, Low Carbon, Intelligent Upgrade Exchange and "Five New" Supply and Demand Conference was held in our city. Huang Dao, Deputy Chief Engineer of China Iron and Steel Industry Association, and Wang Feng, Deputy Secretary of the Municipal Party Committee, attended. Wang Feng said in his speech that the green development of the steel industry is the direction and trend of the times, and intelligent upgrading is the inevitable choice for industrial transformation and winning the future. Rizhao has superior location transportation, complete industrial clusters, and leading technological products, highlighting its advantages and broad prospects for the development of the steel industry. This conference has extensively gathered the wisdom and strength of steel associations and steel enterprises, providing a high-quality platform for deepening exchanges and pragmatic cooperation between supply and demand sides. I hope everyone will continue to care for and support Rizhao, deepen their understanding of Rizhao, and actively invest in Rizhao. Rizhao will create the optimal environment for investment and business development with the best policies and services, allowing the flowers of cooperation to bear fruitful results.

Instrumentation: The trend towards digital intelligence development

Firstly, there was the global financial crisis, followed by the eurozone debt crisis. Over the past two years, the operating environment for power equipment manufacturing companies has been complex and ever-changing. In the process of fully responding, enterprises have begun to strengthen cost control to enhance their ability to resist risks. No enterprise likes a complex and ever-changing business environment, but not liking it does not mean they cannot benefit from it. The current economic environment faced by the power equipment manufacturing industry is causing headaches for business operators and forcing them to enhance their risk resistance capabilities. Since 2009, many power equipment manufacturing companies have been recruiting "cost supervisors" - to develop cost budgets and control cost expenditures. Although cost control has always existed in power equipment manufacturing enterprises, various signs indicate that enterprises have recognized the importance of cost control and are seriously adopting this method. Since the beginning of this year, the problem of "shortage of migrant workers" has become increasingly prominent. From the perspective of the manufacturing industry, this issue that requires the whole society to address means that the labor costs of Chinese enterprises (including power equipment manufacturing enterprises) are constantly rising. Furthermore, today's power equipment manufacturing enterprises are not only facing an increase in labor costs, but also a comprehensive cost increase in raw material costs, labor costs, and social costs. In the power equipment industry, the cost of steel and non-ferrous metals such as copper and aluminum accounts for approximately 70% to 80% of the raw material cost. According to data released by the China Iron and Steel Industry Association and the Nonferrous Metals Industry Association, prices of steel, copper, and other materials have been continuously rising since 2005. For example, copper prices have risen from 20 yuan/kg in mid-2005 to 54 yuan/kg in early April of this year. Although copper prices have since fallen due to the impact of debt crises in some eurozone countries, the price of 43 yuan/kg at the beginning of June this year is still at a relatively high level compared to historical prices. In addition to raw material costs, labor costs and social costs are also becoming increasingly prominent. The labor cost mainly manifests as worker wages, while social costs include product marketing costs, channel expansion costs, etc.