Developing Steel Construction can Resolve the Overcapacity

On Januaray 8th and 9th, The Committee of Steel Structure Experts in China has hold the annual meeting in Wuhan, Hubei Province. More than 200 steel structure experts get together and discussion the current steel industry in China. They proposed to develop steel construction so as to defuse the current serious excess steel production capacity. The characteristic ofsteel construction is light, fast ,better and cheaper to use, the experts believes that structural steel is the most suitable for building industrial steel building construction.

During the meeting, the multi-site large-span grid structure is strongely suggested. Also, in order to facilitate the production of prefabrication, a six tetrahedral units of reticulated spherical shell is brough up. According to the latest reportes, eighty percent of steel building components can be processed in the factory, at the same time it is easy to dismantled. Moreover, some products and materials can be reused and recycled. Compared to the traditional concrete construction, steel construction can reduce 40% of weight, increase four times of construction efficiency, shortened 1/3 construction period, reduce 35% of carbon emissions, and also increase 5% of room rate. Therefore, steel structure is more popular in the developed countries.
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Statistics showed that in the last five years, the amount of steel construction in China is 30 to 50 million tons which is accounting for 5% of steel production totally in Chinese Steel Industry. However, compared with other developed countries, it is very obvious that in China the steel construction application is still in a very low level. The steel construction proportion is over 45% in United State, 28% in Japan, 22% in Germany. Academicians in this meeting believe that developing steel construction can resolve the overcapacity in the Chinese Steel Industry, also it cvan promote the construction of industrialization, to achieve the transformation and upgrading of traditional industries.

Using the Market to Solve the Overcapacity in the Steel Industry

In Januaray, the senior leaders, Li Keqiang has stressed that, under the current overcapacity prescriptions in China, the government will forced to give full play role to the market mechanism. The government will takeing advantage of the market oriented approach to resolve the overcapacity in the Chinese Steel Industry. Specifically, Li Keqiang clearly summarized into three tasks. Including strict control of incremental, proactive reduction, inventory optimization. Besides, Li Keqiang also proposed to highlight production process to solve the "money", "debt", "people" these three key issues. The news reporters has learned that the National Development and Reform Commission, the Ministry and other major ministries have excess capacity on a number of issues to resolve research and deployment policies are expected to be introduced soon.

Li pointed out that the current overcapacity in the two most prominent industry, one steel, one coal. Surplus in these industries has not the industry cycle issues. In the new situation, the government should take " hard measures" to resove the overcapacity. In order to strictly control the incremental, Li Keqiang has stressed that first of all new production has to stopped. Especially, it will not be acceptable to exapnd production capacity under the name of technological innovation.

Finally, Li Keqiang also stressed the need to optimize inventory production capacity, companies want to resolve the overcapacity in the process of the "quantity" cut down, the "quality" to go up, and promote product upgrading, speed up to high-end, smart, green aspects of the transition converting.info@primesteeltube.com

Steel Manufacturers both in UK and China decided to lay off steel workers to survive in the downturn

25 year old steel worker, Matt Cooke who worked for Britain's biggest steel maker Tata Steel worried about his job and the prospects of the steel industry. Tata Steel plans to lay off 900 employees from Scunthorpe because the Chinese steel imports is cheaper than local products. As the same time, the high cost of electricity has increased the price of steel products manufactured locally. In order to ensure the survival, Tata Steel must lay off employees in the company. At the same time, Chinese steel industry is currently facing a huge overcapacity, the decline of the local demand has affected the survival of the entire industry. Tangshan as the industrial city near Beijing, 35 year old steelworker, Jiangjun Suo is also concerned about the future of the steel industry.
China and Britain are both facing the dilemma of global steel prices plummeted, while one of the most important reason behind this is Chinese economic growth has slowdown. Although many British steel workers blamed that China has pushed British Steel Industry into a impasse, but in fact, Chinese Steel Industry is also struggling. Since the slowdown of Chinese economy and the decline demand for steel products domestically, it causes a lot of excess capacity. The cities like Tangshan are facing many pressure, and may local manufacturers focusing more on the international market rather than domestic market. Tangshan is a city have 700 million people and is one of the most important steel industry city in China. After the devastating in 1976's earthquake, Tangshan has quickly rebuilt as the industrial center in north of China. The city's steel production quantity has reached 90 million tons which has overpass the United States. However, the decline of steel prices has led many small and private factories bankruptcy. The situation in this year is more like a economy " earthquake" for Tangshan. " The current situation is not good" Jiangjun Suo Said, he worked in Tangshan Youfa Steel Pipe Company. " Although the company is still producing, but the profits declined. Many small factories nearby had closed down in this year. I am worried about losing my jobs. China still needs steel products, hope I can find work in other factories."

Tangshan located in a province which reserves enough iron ore. Due to the earthquake in 1976, many local infrastructure were damaged which create a developing chance for private steel companies. Since 2008, with the rapid development of Chinese economy, Chinese steel consumption is growing. Many small steel factories had the chance to get fund and expand quickly. Today, steel prices plummeted was an negative impact on this city's growing. For example, Tangshan Iron and Steel Company as a subsidiary of Hebei Iron and Steel Group, is planned to shut down their 2000 squire meters' blast furnance outage in this month and sealed a production facility which has the production capacity of 6000 tons per day. Another Jianbang Steel Company has shut down their blast furnance outage due to the lost of the company. Many private factories have closed, the trade and logistics centers has been empty for a long time. They are the victims of 2008 Chinese 4 trillion RMB fiscal stimulus which led to unsustainable construction wave during that time. " Nobody can make money in steel industry in China. Not only in United Kingdom facing this situation, so does China." A 32 year old steel trader, Guangshui Ting said. " Every ton of steel produced by the factories, will causes a lose of 100 RMB (15.78 US Dollars) for the manufacturers. For the manufacturer of wire and metal products, the price of steel billets fell to a historic low price. (1600 RMB per ton = 252.54 US Dollars per ton). The price for steel billets is even lower than the price of one ton of cabbage in China today. China has the ability to produce 1.2 billion tons of steel products per year, the quantity covers about three quarters of the total global demand. The decline in domestic demand means that China have to make up for the lack of domestic demand through exports. Last year, only in Hebei Province the export quantity for steel products has reached 2720 tons. This quantity covers around 29% of the country's total steel.

According to the International Iron and Steel Statistics Bureau Data, the UK is one of the Chinese steel export market last year. The number of British imports from China has reached 752000 tons. Although this quantity is only a small part of the UK's total steel imports, the lower importing cost has reduced the market price in UK which create a negative impact on UK steel industry downturn. However, workers in UK steel industry has also admitted that there are many other reasons causing the decline of British steel industry. " This is not China's fault, in the Europe Market, UK can not compete with other Europe Countries anyway. 35 year old steel worker, John Laurens said who worked in Scunthorpe Steel Industry. British steel industry is committed to reducing the high cost of energy, but the world's highest environment protect tax make this issue more complicated. The British government said that what they can do is very limited, no government can change the price of steel, or changing foreign exchange rates, or even ignore the international norms or free trade state aid rules.

In China, the entire steel industry is dominated by large state owned steel companies. While in the UK, there are additional government funds to help diversify the iron and steel development and retraining the steelworkers. Tangshan Iron and Steel's annual production quantity is over 40 million tons at present, the government indicated that it will be decreased before the year of 2017, and the city is seeking economic restructuring, and will be positioned as one of the advanced robotic research and development centers in China in the future. While in the UK, the government and Tata Steel has committed to allocate 9 million pounds ($ 13.9 million) to attract new businesses into the steel industry and employment retraining.

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