At present, the iron and steel industry in China is experiencing a profound structural differentiation of "ice and fire". On the one hand, driven by the goal of "double carbon" and industrial upgrading, the demand for steel for new energy vehicles has grown rapidly, becoming a new blue ocean of high value-added products in the industry; On the other hand, the traditional building steel market is affected by the real estate adjustment, and continues to face the dual pressures of high inventory and weak demand. This increase and decrease not only test the management wisdom of steel enterprises, but also clearly outline the future transformation path of steel industry.
1. The demand for a new engine: the quality and quantity of steel for new energy vehicles are rising.
The explosive growth of the new energy automobile industry has brought new and higher technical demand increment to the steel industry, mainly in the following areas:
- High-end electrical steel (silicon steel sheet): This is the core material of the driving motor, and its performance directly determines the efficiency, power and endurance of the motor. The demand for high-grade non-oriented electrical steel for new energy vehicles is "blowout", which requires high magnetic induction, low iron loss and high strength. Leading domestic steel enterprises such as Baowu and Shougang are accelerating R&D and capacity layout to replace imports and meet the rapidly growing demand of domestic new energy vehicle enterprises.
- High-strength and lightweight body steel: In order to offset the battery weight and improve battery life, lightweight body is very important. Ultra-high-strength steel (UHSS) and hot-formed steel (PHS) have been widely used in A/B columns of car bodies, battery packs and anti-collision structures. This kind of steel can reduce weight while ensuring the highest level of safety performance.
- Steel for battery pack structure: The battery pack needs a solid frame to protect the battery cells. It is a mainstream scheme to make battery pack trays and covers with high strength and high fatigue performance aluminum-plated or galvanized steel plates, which gives consideration to safety, cost and process maturity.
Industry Impact: The steel orders for new energy vehicles are characterized by "small batch, multiple specifications, high performance and high stability", which promotes the transformation of steel enterprises from large-scale production to "flexible manufacturing" and "material solution provider", and the added value of products and technical barriers are significantly improved.
2. The traditional field is under pressure: the problem of high inventory of construction steel needs to be solved
In sharp contrast to the fiery steel for new energy vehicles, the construction steel market represented by rebar and wire rod continues to be in a downturn.
- Inventory pressure source: the newly started area and construction area of real estate continued to decline year-on-year. Although infrastructure investment remained resilient, it was difficult to completely hedge the decline gap of real estate, resulting in weak demand for construction steel terminals. At the same time, some steel mills resumed production in the early stage, and the supply-side adjustment was relatively lagging behind, resulting in both social inventory and steel mill inventory rising to historical highs in the same period.
- Market performance: high inventory directly suppressed the price of construction steel, making it fluctuate near the cost line for a long time, and the profit of steel mills was meager or even lost. The traditional seasonal demand rules of "golden three silver four" and "golden nine silver ten" have been broken, and market confidence needs to be repaired.
3. The way to break the game: the supply and demand sides exert their strength, and the industry actively adjusts the structure.
Facing the structural contradictions, the steel industry and the policy level are seeking solutions from the supply and demand sides:
From the supply side (steel enterprises take the initiative):
- "Fixed production by sales" and flexible production: more steel mills implement strict "order production" mode for construction steel, and flexibly adjust rolling capacity according to market conditions to avoid invalid inventory accumulation.
- Capacity replacement is inclined to "excellent special steel": under the guidance of the policy, the steel capacity replacement project focuses on the fields of excellent special steel such as electrical steel, automobile plate and high-end tool steel, and optimizes the product structure from the source.
- Industrial chain coordination: Leading steel enterprises strengthen early R&D cooperation (EVI) with new energy vehicle enterprises and battery enterprises, realize synchronous development of materials and parts design, and bind high-end demand.
From the demand side and policy perspective (tapping new kinetic energy):
- Accelerate the transformation of "steel demand": shift the development focus from new real estate to "three major projects" (affordable housing construction, urban village reconstruction, and "flat and emergency" public infrastructure construction) to provide new stable support for the demand for construction steel.
- Open up new application scenarios: encourage to increase the application proportion of high-strength building steel in steel structure houses, bridges and modular buildings, and promote demand upgrading by improving the standard and quality of steel, rather than simply pursuing quantity growth.
- Green export digests production capacity: On the premise of meeting domestic demand, we will encourage the orderly export of high-cost and high-standard steel products and participate in international competition, especially aiming at the infrastructure construction needs of countries along the Belt and Road.
4. Differentiation has become the norm, and transformation and upgrading are the only way out.
It is generally believed in the industry that the structural differentiation of the steel industry is not a short-term phenomenon, but a medium-and long-term trend. The growth of steel used in new energy vehicles, high-end equipment manufacturing, new energy (wind power, photovoltaic) and other fields will gradually offset and eventually surpass the shrinking demand for traditional building steel.
The rapid growth of steel for new energy vehicles has illuminated a new route for high-quality and efficient development of the steel industry; The inventory pressure of construction steel is the "pain" that the traditional development model must experience and the catalyst for reform. In the structural transformation of "one increase and one decrease", China iron and steel industry is being forced to take the initiative to bid farewell to extensive growth and move towards a new stage of high-quality development oriented to technological innovation and market demand. Whether we can successfully deconstruct the old pressure and embrace the new growth will determine the position of each steel enterprise in the future market structure.
