“China’s iron and steel industry is at a critical stage of tackling tough challenges and achieving high-quality development,” said Gan Yong, President of the Chinese Society for Metals and an academician of the Chinese Academy of Engineering, at the 12th China Iron and Steel Annual Conference on August 15. “Looking ahead, technological innovation is a powerful engine driving the high-quality development of China’s iron and steel industry and a vital force behind the building of a strong steel nation.”

Gan Yong said that, looking back at history, technological innovation has been the core driving force behind the dramatic transformation of China's steel industry. The remarkable achievements of China's steel sector have been made possible not only by the tremendous opportunities brought about by the rapid development of the national economy, but also by the steel industry's own continuous and sustained technological advancements.

The rise of a major power would have been unthinkable without the steel industry’s indispensable contribution. “As of the end of 2018, China had cumulatively produced 12.18 billion tons of steel, of which 11.46 billion tons were produced since the reform and opening-up began. These steel products have provided robust support for the development of the national economy and have served as a powerful foundation for the wide array of new equipment showcased during the grand military parade marking the 70th anniversary of the founding of the People’s Republic of China,” pointed out Gan Yong. “It is fair to say that without these steel products, we wouldn’t have the 30,000-kilometer high-speed railway network, the 143,500-kilometer highway system, the over 6,000-kilometer urban rail transit network, the more than 230 civil aviation airports, or an annual automobile production capacity of 29 million vehicles. Moreover, China would not have become the world’s leading shipbuilding nation, the world’s largest manufacturer of household appliances, the world’s top producer of construction machinery, the world’s foremost maker of power-generation and transformer equipment, nor would it have risen to become a manufacturing powerhouse producing more than 200 types of industrial products in first place globally.”

He further pointed out that the development and growth of China’s steel industry have almost paralleled its technological advancement. Technological innovation has been a key factor driving the sustained development of the steel industry. Looking back to the early days of the founding of New China, our country had only seven blast furnaces, 12 open-hearth furnaces, and 22 small electric furnaces—capable of smelting just over 100 steel grades and rolling more than 400 different product specifications. Even by 1978, the production process structures and equipment levels of Chinese steel mills were still far behind those of foreign countries. Ironmaking was largely conducted in small blast furnaces ranging from tens to hundreds of cubic meters in capacity; steelmaking relied mainly on open-hearth furnaces and bottom-blown converters; casting was done exclusively via mold casting; rolling was carried out in two-pass processes; and finishing mills predominantly used horizontal and reciprocating rolling mills. Steel products at that time were mainly composed of rebar, wire rod, and narrow strip steel, with little emphasis on modern plate and pipe products. Following the reform and opening-up policy, China’s steel industry entered a golden age of development. Marked by the Wuhan Iron and Steel No. 1.7-meter rolling mill project and the construction of Baosteel, the industry embarked on a path of modernization, starting from importing, absorbing, and innovating technologies, and taking “introducing advanced production lines and enhancing automation levels” as its guiding principle. In the 1980s and 1990s, another major technological breakthrough was achieved through efforts to “increase the proportion of continuous casting and improve the ratio of plate to pipe.” Entering the 21st century, the steel industry began placing greater emphasis on integrated innovation and independent innovation. Process and equipment technologies accelerated their development toward larger-scale, higher-efficiency, automated, longer-lasting, and environmentally friendly production processes, while product development shifted rapidly toward high-end applications.

Gan Yong believes that, judging from the path of technological advancement in China's steel industry and the current technological levels of various processes and sectors within the broader metallurgical industry, China's steel industry is well-positioned for high-quality development.

He analyzed and pointed out that, in terms of production scale, China has already established the conditions and foundation to analyze and address issues related to the capacity and output of ore, coke, scrap steel, iron, steel, and steel products from the perspective of a “resource-environmental mega-cycle.” From the standpoint of processes, technologies, equipment, and automation, China’s steel industry has either reached or essentially attained world-class advanced levels in overall equipment and technology. The core equipment at large- and medium-sized steel enterprises has already achieved internationally advanced standards, and China has built the world’s most advanced, intelligent, and environmentally friendly circular metallurgical production processes. Process integration is becoming increasingly precise, and technologies in automation, informationization, and intelligence are developing rapidly. In terms of product R&D and application, steel quality is steadily improving, and product varieties are shifting toward the mid-to-high end. A variety of advanced steel materials—such as automotive sheets, electrical steel, heat-resistant steel, stainless steel, and bearing steel—have successively achieved breakthroughs, with some steel grades now reaching international advanced levels. As for environmental protection technology, both the total amount of pollutant emissions and the per-unit-product emission levels have been significantly reduced, leading to a marked improvement in the environmental performance of steel enterprises. Overall, China’s steel industry possesses the material foundations, technological capabilities, and human resources necessary for high-quality development, and has also forged a broad consensus on pursuing such high-quality development.

Gan Yong also pointed out that China's iron and steel industry is at a critical stage of tackling tough challenges in its pursuit of high-quality development, and it faces severe challenges—and pressing issues that urgently need to be addressed—in many areas, including the environment, resources, energy, product variety, quality, and costs.

Take, for example, the issue of industrial structure. The industrial structure is unreasonable, with low industry concentration and a further downward trend. In 2018, the output of special steel in China accounted for less than 14% of total crude steel production. In the first half of 2019, steel-producing enterprises that were members of industry associations saw their steel output increase by 5.6% year-on-year, while non-member steel enterprises experienced a much higher year-on-year growth rate of 24%.

Take the issue of resource security, for example. The steel industry consumes vast quantities of resources, and its dependence on foreign iron ore is extremely high. In 2018, China imported 1.038 billion tons of iron ore and 281 million tons of coal.

Another issue is homogeneous competition. The steel industry is facing severe homogeneous competition, which is now spreading to high-end products. Products such as stainless steel, electrical steel, and automotive sheets are showing signs of oversupply. Take electrical steel as an example: in 2018, China’s capacity utilization rate for non-oriented electrical steel was 83.89%, while the capacity utilization rate for oriented electrical steel was only 73.65%.

Standing at a new historical juncture, the iron and steel industry must embrace the mission of building China into a global powerhouse in the steel sector. It should take high-quality development as its main thread, regard technological innovation as its strategic cornerstone and core element, focus its efforts on addressing key issues and critical shortcomings, aim at the forefront of global science and technology, target forward-looking basic research and breakthroughs in pioneering, original technologies, and wage a tough battle to advance the sophistication of industrial foundations and the modernization of industrial chains.

Gan Yong suggested that the next phase of high-quality development for the iron and steel industry should focus on the following six key areas:

First, accelerate the upgrading of product structure, enhance the supply capacity of mid- to high-end products, and promote the R&D and industrialization of high-end steel varieties.

Second, we must effectively plan and adjust aspects such as optimizing production capacity structure, refining enterprise structures, and promoting clustered industrial development. While building world-class brands, world-class enterprises, and world-class advanced manufacturing clusters, we should proactively prevent the emergence of new overcapacity.

Third, we will vigorously develop intelligent manufacturing and green manufacturing projects tailored to large-scale metallurgical industrial processes, promote the application of advanced technologies such as the Internet of Things, big data, 5G, and artificial intelligence in the steel industry, and accelerate the digital transformation of the steel sector. We will also popularize and apply energy-saving and environmentally friendly processes, technologies, and equipment, and strengthen resource recycling and utilization within the broader closed-loop supply chain.

Fourth, we must effectively coordinate and collaboratively develop joint layouts with industries in the resource, energy, and downstream application sectors.

Fifth, by engaging in international cooperation through various approaches, we will “master” the global mineral resource landscape and enhance our capacity to secure resources.

Sixth, actively implement the “Going Global” strategy and enhance the level of international operations. In line with the development needs of countries along the Belt and Road, promote the outbound expansion of advanced equipment, technology, management practices, and capital.

Finally, Gan Yong stated that for China’s steel industry to achieve high-quality development, it must rely on innovation-driven transformation and upgrading, and this requires the concerted efforts and relentless dedication of all steel industry workers.