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China's steel industry enters a new stage of high-quality development.
Release date:
2018-05-22
Source:
On May 18, Huang Yixin, Chairman of Nansteel, stated at the "High-Quality Development: Charting the Path to a Steel Powerhouse" summit held in Nanjing that, to address the conflict between personalized customization and large-scale production under the "Industry 4.0" framework, Nansteel has developed an intelligent manufacturing platform called "JIT (Just-In-Time Delivery System) + C2M (Customer-to-Manufacturer)." This platform seamlessly connects users' individualized needs with mass production, enabling timely delivery from the steel plant directly to the end consumer.
Smart manufacturing is one of the five key projects under "Made in China 2025." The steel industry, as a highly automated, process-oriented sector, already boasts a robust foundation and immense potential for smart manufacturing development. Currently, China's steel industry simultaneously embraces mechanization, electrification, automation, and information technology integration—though there are notable disparities in the level of advancement among different companies.
Attending the meeting Expert It was noted that China's steel industry has entered a new stage of high-quality development, with a growing number of steel enterprises emerging as pioneers in this transformative journey. These companies have successfully integrated unique strategies tailored to their specific contexts, accumulating valuable lessons that can serve as benchmarks for the broader industry. At the same time, while China's steel sector continues to make strides toward high-quality, sustainable growth, it still faces several challenges that will require collaborative efforts from all stakeholders to overcome.
Nangang Steel Sets a Benchmark for High-Quality Development
Nangang President Zhu Ruirong told a reporter from China Securities Journal, "JIT+C2M" represents user-centric manufacturing at the production end, enabling scalable and flexible production while maintaining just-in-time delivery and high efficiency—ultimately delivering personalized customization services to customers—and leveraging e-commerce and big… Data , cloud computing, and other "2Link" Technology , enabling direct interaction with users.
"In this model, we not only serve as a first-tier downstream user of steel but also reach directly to the users—right up to the final consumer end where the product is actually used. For example, we supply high-strength steel and wear-resistant steel to..." Construction machinery The company—they built it. Excavator "Additionally, it’s also sold for use in mines—meaning Nangang’s services are now extending all the way to the mining sector, closely addressing the technical needs and component-replacement demands of mining operations, ultimately helping to build a C2M ecosystem that adds value across the entire supply chain." "For instance, take shipbuilding: this innovative model can reduce both the shipbuilding cycle and labor costs by one-third, while cutting material usage by more than 20%."
Industry insiders say that rolling out this new model represents not only a "revolution in production processes" but also a "revolution in business philosophy" at Nangang Steel. After all, steelmaking is a process-oriented industry involving both chemical and physical transformations, making it incredibly challenging to achieve flexibility—and adding the complexity of directly serving end consumers at the very end of the supply chain. This innovative approach is paving the way for a fresh growth model as the steel industry moves toward the mid-to-high-end market segment.
Zhu Ruirong stated that under this new model, the volume of customized delivery services reached 1.71 million tons from June 2014 to 2017. The product development cycle was shortened by 30% compared to the past, while contract fulfillment rates improved to 94.28%, and the qualified rate for original steel grades increased to 97.25%. Moreover, the customized delivery service has expanded beyond shipbuilding plates to include products such as wind power components, structural materials, construction machinery parts, and bridge applications, resulting in a significant boost in customer satisfaction, now standing at 91.26%.
On December 14 last year, the Ministry of Industry and Information Technology held a national symposium on the integration of IT and industrialization. Nansteel’s pioneering "JIT+C2M" model innovation was selected for nationwide promotion at the national level. Later that same year, the JIT+C2M platform construction project received a central government financial subsidy of 20 million yuan—making it the only project in Jiangsu’s steel industry, and indeed across the entire nation, to secure this funding.
Entering a new stage of high-quality development
As a key industry prioritized for supply-side structural reform, the steel sector has vigorously pushed forward the "Three Reductions, One Cut, and One Supplement" initiative. Taking the resolution of excess capacity as its breakthrough point, the industry is working to optimize its structure, overcome challenges, upgrade operations, and enhance both quality and efficiency. A growing number of steel companies have already begun embracing high-quality development practices. Companies like Baowu, Ansteel, Shougang, HBIS, Magang, China Steel Group, as well as Shagang, Fangda Special Steel, Nangang, and Zhongtian Steel, stand out in various areas—including equipment levels, product sophistication, innovation capabilities, smart manufacturing, eco-friendly growth, employee satisfaction, and profitability—providing valuable lessons that can be widely applied as the Chinese steel industry strives toward sustainable, high-quality development.
Chi Jingdong, Vice Chairman of the China Iron and Steel Association, stated at the forum that China's steel industry possesses the material foundation for high-quality development, as well as the technological and talent resources necessary to achieve it. Technologically, the industry has continuously optimized its industrial structure, significantly improved product quality, made substantial strides in energy conservation and environmental protection, and seen a steady stream of innovative scientific and technological breakthroughs. Moreover, there is now a growing consensus across the industry toward pursuing high-quality development.
Chi Jingdong stated that the factors mentioned above have enabled the steel industry to become one of the first sectors to achieve high-quality development.
Data shows that in 2017, the average [of] member enterprises surveyed by the China Iron and Steel Association was Sales Profit margins have rebounded to 4.7%. After generations of dedicated efforts, China's steel industry has built a comprehensive industrial chain—from geological exploration and mining to ironmaking, steelmaking, rolling, and even advanced processing. Today, the country’s technological capabilities in process equipment, as well as its levels of automation, information technology, and energy efficiency and environmental protection, have all reached world-class standards overall.
Chi Jingdong stated that the transformation and upgrading of the steel industry must focus on addressing the issues of imbalance and inadequacy in development, adhering to the principles of prioritizing quality and maximizing efficiency to significantly enhance both the quality and profitability of growth. This marks the steel industry's entry into a new phase of high-quality development, where progress will be driven by innovations in areas such as technology, quality, cost control, services, and management.
Still requires joint efforts from multiple parties.
Industry insiders say that high-quality steel development currently faces four major challenges: increasing pressure to prevent the addition of new production capacity; rising concerns about the resurgence of "strip steel" practices; the urgent need to streamline policies supporting the growth of short-process steelmaking; and mounting environmental pressures on steel companies.
Regarding this, Xu Wenli, Director of the Iron and Steel Division at the Raw Materials Industry Department of the Ministry of Industry and Information Technology, stated that the achievements made through supply-side reforms in the steel industry have not come easily and must be jointly safeguarded and cherished by all stakeholders in the sector. However, as industry profitability improves, new challenges have emerged—some regions and enterprises are once again showing strong impulses to add new production capacity, leading to frequent resurgences of "strip steel" production. "To address this issue, from late May to late June, an inter-ministerial joint conference will organize a special inspection campaign aimed at preventing the resurgence of overcapacity and the reappearance of 'strip steel' production. The goal is to firmly discourage risky plans to launch new projects or expand capacity, thereby further solidifying the gains made in reducing excess capacity."
Li Xinchuang, President of the China Metallurgical Planning & Research Institute, believes that in the future, the steel industry will no longer compete primarily on product quality alone—but rather on supply chain and customer relationships. It will also come down to a company's ability to effectively allocate resources. To stay ahead, firms must strengthen their supply chains and customer partnerships, moving beyond simple buyer-seller dynamics. By doing so, they can build global platforms for resource integration, fostering deep supply-chain collaboration and enabling mutual advantages through complementary strengths.
Smart manufacturing is one of the five key projects under "Made in China 2025." The steel industry, being a highly automated process-oriented sector, already enjoys a strong foundation and vast potential for smart manufacturing development. Currently, China's steel industry simultaneously features mechanization, electrification, automation, and信息化 (information technology integration), though there are significant disparities among different companies' levels of advancement.
Xu Wenli stated that since 2015, the Ministry of Industry and Information Technology has launched a special pilot and demonstration initiative for intelligent manufacturing. In the steel industry, Baosteel’s hot and cold continuous rolling processes, Ansteel’s mining operations, Tanggang’s bar products, Taiyuan Iron & Steel’s stainless steel cold rolling, and Shandong Shengtong Steel Cord’s high-precision specialty steel wires—used in applications such as sheet metal, mining, bar and structural materials, stainless steel, and steel wires—have been selected as demonstration projects. "We aim to identify a development roadmap tailored specifically for intelligent manufacturing in the steel industry through these pilot initiatives, ultimately serving as a catalyst to drive China’s steel sector toward high-quality growth," he added.
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