Source：Changjin Metal Product PipeHits：
The output of the steel industry has ranked first in the world for nine consecutive years, but this does not mean that China is a steel power. The glory of production can not cover the internal crisis of the steel industry, and the key to its crisis is manifested in three issues.
First, the energy consumption is large.
The ore, coal, electricity and other resources used for producing one ton of steel are much higher than those of developed countries and even the world average. Moreover, with the development of the steel industry in these years, some places have made large steel and steel, and the amount of energy consumed per unit of steel is increasing.
Second, the product structure is unreasonable.
Long-value steel with low added value accounts for more than 60%, while high-grade steel required for industries such as automobiles, machine tools, and home appliances is imported in large quantities. The reason for this deep level is that the scale of steel companies is too small to reach the level of production required by economies of scale and does not have the ability to innovate. Therefore, the result of the development of the steel industry is the import of a large amount of ore. After processing into low-grade steel, it is exported in large quantities, consuming precious resources, causing total tension in coal and electricity, leaving pollution and earning only a negligible profit.
This extraordinary development of the steel industry is not in line with China's overall direction of achieving sustained growth and building a conservation-oriented economy. Therefore, on July 20, the State Council announced the "Steel Industry Development Policy" and implemented the new steel policy, which is extremely meaningful. The rational control of production scale, improvement of industrial concentration, optimization of variety structure, etc., have strategic guiding significance for the development of China's steel industry.
The third is the market
The positive fiscal policy has made China take the lead in getting out of the financial crisis. However, the imbalance of economic development, uncoordinated and unsustainable problems are still outstanding, and the economic growth rate under the guidelines of growth, inflation control and structural adjustment has slowed down. The raw materials in the steel industry are still high, the shortage of funds, the rising cost of financing, and the flat market. This is an unprecedented new situation.