| The TEX Report Topics < Iron Ore > | |
| HOME >> Topics List >> May, 2009 >> 26 (Tue) |
| MIIT Notifies Current Status, Problems Of Chinese Steel Industry (3/3) |
| = Gross control, structural adjustments, and development toward enhancement of quality, efficiency and profitability = |
|
(Continuation) 3. Gross control, structural adjustments, and development toward enhancement of quality, efficiency and profitability Steel products constitute basic raw materials for the buildings and machinery industry. While downstream industries are yet to be reactivated, the steel industry should control gross amount. They should meanwhile take advantageous opportunities to exert themselves to carry out structural adjustments, thereby realizing development toward enhancement of quality, efficiency and profitability. To implement these, it is essential to attach importance to the following work: (1)To carry out control of excessive increase in production. Regional authorities in charge of industry should in close league with departments concerned, take responsibility to have steel mills suspend operation of outmoded ironmaking, steelmaking and steel rolling facilities, being objects of elimination, and have them refrain from resuming operation of facilities suspended. Further, they should promote league between banks and companies. Loans by local banks should be reduced or stopped for outmoded steel companies or those attempting to increase production regardless of market demand. CISA should so arrange that steel companies take self controlling measures for the production of over capacity steel commodities, such as hot rolled plates, cold-rolled plates and middle and heavy steel plates. Steel companies should make much of supply and demand balance, formulate production plans matching market demand, refrain from conducting production prior to receiving orders or production that can not cover costs, stop shipping out commodities without assuring due collection of payment, thereby making efforts to realize a 100% sale ratio to production, and a 100% collection ratio to sales. Large and middle-scales steel companies should take initiatives to suspend operation of such production facilities as do not partially fulfill existing norms and standards, and should complete market analysis before putting newly introduced production facilities into operation. CISA should, in accordance with the requirements in the "Urgent Notification on Deployment of Key Control and Assignment of Statistical and Monitoring Work versus Company's Daily Bulletins and Ten-Day Bulletins" (MIIT No. 2008-366), and the "Notification regarding Reinforcement of Intensive Control of Monitoring and Statistical Works Conducted by Associated Companies" (MIIT No. 2009-86), improve in a more sound manner the statistical and monitoring system, modify existing statistical and monitoring measures by utilizing electronic information technology, and arrange and grasp immediately dynamic data and information on production, stock and sale, thereby extending services so that the government and steel companies may be able to establish their policies. (2)To take initiatives for adjusting commodity configuration. . The recent launching by the Central Government of the 4-trillion RMB policy to promote investments has also brought subsequent publications of a series of adjustment and promotion plans in the industries of light articles and commodities, petrochemical, automobile, plant, shipbuilding and physical distribution. Steel companies should strengthen their studies and investigations into these policies and/or measures; grasp and analyze what are newly required of steel products species, quality, and performance by the governmental policies to expand investments and to promote development plans of associated industries; reinforce adjustments of commodity configuration with initiatives and long-sighted visions; and taking into account the key points indicated by the government in respect to investments and development of associated industries, make efforts to develop marketing activities, positively propel R&D, produce commodities that will match market demand, and to satisfy the leveling up requirement of associated industries as well as the needs of important construction work. (3)To accelerate the elimination of outmoded production facilities. . Such laws as "Anti Air Pollution Law", "Safe Production Law", "Energy Saving Law", "Promotion Law for Clean Production", etc., should be strictly abode by, and outmoded equipment stopped in accordance with the relevant laws. The governmental policy to discriminate electric power tariffs should be strictly fulfilled: BOFs and EAFs with 20-T or below capacity being the group to be eliminated; and BOFs of 120-T or below, EAFs of 70-T or below, and blast furnaces of 1,000 m3 or below, which have been constructed in and after August 2005, and being the group of restrictive production capacity, should continue to be strictly subjected to the tariff applicable for the group to be eliminated and the group of restrictive production capacity, respectively. It is recommended that by resorting to the central government's funding system for encouraging elimination of outmoded production facilities, steel companies apply for disbursement of the necessary fund by regional administrations, and take best measures to reassign employees potentially becoming redundant as a result of facility eliminations, thereby maintaining public tranquility. Regional departments in control of industries should, in accordance with the requirements in the "Adjustments of Steel Industry and Promotion Plans" and in league with all governmental departments in charge of development and reform, finance, land and resources, environmental preservation, etc., establish the items of measures in detail, put into practice the tasks imposed, list up the names of the companies with outmoded facilities, respective facilities, and exert themselves to have the companies carry out the tasks of eliminating outmoded facilities agreed in writing with the National Development and Reform Commission (NDRC), ahead of the targeted deadlines. Likewise, as to all the ironmaking, steelmaking and steel rolling facilities being objects of elimination that are yet to be specified in the documents agreed with the NDRC, they should cause elimination by the deadlines. (4)Illegal capacity expansion work should be strictly banned. . In accordance with the current investment control code established by the government, all capacity increasing projects - whether greenfield or brownfield – of ironmaking, steelmaking and steel rolling facilities require approval by the competent departments in the government, and those that are not backed up by approvals are regarded as illegal. Each region should strictly fulfill the investment control code, and are prohibited from granting approvals, exceeding their power, for the construction of new steelworks. All construction work under way that are proved illegal should be suspended. (5)To strengthen technical remodeling and company control. . Steel companies are required to accomplish development by their own. Taking current advantageous opportunity that allows lower cost investment, they should, by positioning technical remodeling as the key point of investment, positively adopt energy-saving technologies including utilization of surplus heat generated in the sintering process, as well as technologies of integral use of resources such as low-grade and hard to process iron ore; conduct R&D for high-strength and high-end steel products; and eliminate, remodel or improve outmoded production technologies or equipment. In addition, they should further strengthen control of costs, fund, quality and sale, conduct thoroughgoing work to extract potentialities for achieving targets, and make continued efforts toward improving techno-economic indices. Further, by reinforcing technical rebuilding and control, they should see to it that product costs be reduced, commodity configuration be optimized, product quality be enhanced, and new methods for raising efficiency and profitability be fostered, and overall competitiveness be enhanced. (6)Regarding orderly system for standard steel products and iron ore import trade. . Steel companies should strictly abide by "Pricing Law" and "Anti-Unfair Competition Law", and eradicate all vicious acts such as sacrifice sale, and unjust freezing of selling prices for promoting sales. MIIT will support establishment of a long-lasting, stable and mutually beneficial relationship among steel companies, upstream companies, downstream users, and trading firms. Companies eligible for importing iron ore should, by making scrutiny into real domestic demand for the material for iron and steel production, precisely grasp required quantities and purchasing rhythm of imported iron ore, and avoid making massive and indiscreet import. CISA and CCCMC are required to study effective measures for reducing the number of intermediary trading firms involved in iron ore import, to supervise the volumes and physical distributions of imported iron ore, to prevent entry of new companies that do not fulfill the requirements of the government's industrial policies, to foment representation system for imported iron ore, and to put and end to such acts as massive hoarding, unlawful resale, etc. Should the system of steel products and iron ore trade be disordered, CISA and CCCMC should take necessary steps at their own judgment so as to maintain the principles of fair market competition. * The Ministry of Industry and Information Technology of the People's Republic of China./April 24, 2009 (End) |
| last modified : Fri 29 May, 2009 [10:36] |
