China Special Steel Industry Outlook in the 15th Five-Year Plan

Special steel is the "special force" for the development of new quality productivity in the steel industry, and is also the vanguard of the transformation, upgrading and high-quality development of the steel industry. From high-end manufacturing fields such as aerospace, national defense and military industry, to key areas related to national economy and people's livelihood such as automobile manufacturing, mechanical equipment, energy and electricity, and shipbuilding and marine equipment, special steel is everywhere. As the core basic material to support the implementation of major national strategies and ensure the steady progress of high-end manufacturing, special steel has become a key indicator for measuring the development level of a country's steel industry and even manufacturing industry with its unique performance and important role.

During the 14th Five-Year Plan period, China's special steel industry has achieved remarkable development milestones and accumulated valuable experience. As the 14th Five-Year Plan approaches its conclusion, it is of significant practical importance to review the industry's progress, anticipate its prospects for the 15th Five-Year Plan, and explore pathways for high-quality development.

Achievements of my country's special steel industry since the 14th Five-Year Plan

During the 14th Five-Year Plan, facing challenges such as weak market demand, high inventory, price pressure and intensified market competition, my country's special steel industry has withstood the test and achieved remarkable achievements: my country's special steel output ranks first in the world, and special steel varieties are the most complete in the world; mergers and reorganizations are accelerated, and the special steel industry structure is constantly optimized; leading enterprises and leading enterprises in subdivided fields have taken shape, and the product quality of some subdivided fields has reached the world's leading level; a large number of special steel talents who understand technology and management have been trained, and a large number of special steel enterprises that are both environmentally friendly and low-carbon have been built.

First, the output has been stable and increased.

According to data from the China Special Steel Enterprise Association (hereinafter referred to as the Special Steel Association), in 2024, the crude steel output of key statistical member enterprises nationwide reached 115.05 million tons, an increase of 6.1% over 2021; the output of high-quality special steel increased steadily, reaching 78.69 million tons in 2024, an increase of 30.3% over 2021; among key varieties, the output of bearing steel and gear steel increased steadily, reaching 4.97 million tons and 5.02 million tons in 2024, respectively, an increase of 12.2% and 39.1% over 2021.

Second, the variety structure is constantly optimized.

The product structure of special steel in my country is becoming increasingly perfect. At present, it has formed a variety structure with a complete range of varieties such as plates, bars, wires, tubes, and profiles, as well as a rich variety of high-end special steel varieties such as high-performance bearing steel, gear steel, spring steel, tool steel, stainless steel, high-temperature alloy, and corrosion-resistant alloy. The market share of many varieties ranks first in the world. CITIC Pacific Special Steel Group, Baowu Special Metallurgy, Fushun Special Steel, TISCO, Northeast Special Steel, Xining Special Steel, Tiangong International and other companies occupy an important position in product variety development. my country's special steel industry has gradually established an independent and controllable industrial system, and the quality and performance of products have steadily improved, which has strongly supported the development of key areas such as national defense, aerospace, and high-end equipment manufacturing.

Third, scientific and technological innovation has achieved fruitful results. During the "14th Five-Year Plan" period, my country's special steel industry has made great progress in innovation and development. First, R&D investment continues to grow. In 2024, the R&D expenses of member companies will reach 22.6 billion yuan, an increase of 29.9% over 2021; CITIC Pacific Special Steel Group, Nanjing Iron and Steel Co., Ltd., TISCO Stainless Steel and other leading domestic special steel companies will reach 3.90%, 3.31% and 3.23% in 2024, respectively, which is much higher than the industry average. Secondly, the research and development of new products has made significant progress. Daye Special Steel's aviation bearing steel M50, EMS200 high-temperature alloy for valve valves, Tianjin Steel Pipe's deep-sea pipeline pipes and ultra-deep well oil casing, Taigang Stainless Steel's MARKⅢ LNG (liquefied natural gas) ship/tank 304LG plate, Panchang Special's high-temperature alloy wide cold-rolled thin plate and other products have achieved breakthroughs. Finally, scientific and technological achievements continue to emerge, and projects such as "Research and Application of High-quality, Low-cost, Large-size Ultra-high Strength Steel for Commercial Aircraft" won the first prize of the Metallurgical Science and Technology Progress Award.

Fourth, intelligent manufacturing is accelerating.

Since the "14th Five-Year Plan", my country's special steel enterprises have accelerated the construction of industrial Internet platforms, promoted digital control of the entire production process, and realized the comprehensive interconnection and interoperability of equipment, systems and data; advanced technologies such as big data and artificial intelligence have been widely used, and intelligent equipment such as robots, smart sensors, and unmanned overhead cranes have been widely deployed on special steel production lines, and the production process of some production lines has been automated and unmanned. Special steel enterprises have carried out in-depth collaborative cooperation with upstream and downstream enterprises to jointly build an intelligent manufacturing ecosystem and promote the coordinated development of the industrial chain. Xingcheng Special Steel promotes digital intelligence empowerment, strengthens the transformation of special steel smart factories, and becomes the first "lighthouse factory" in the global special steel industry, representing the top level of smart manufacturing and digitalization in the global manufacturing industry today. Nangang Co., Ltd. has achieved successful practice in intelligent and digital transformation, becoming an industry pioneer in intelligence and digitalization.

Fifth, green and low-carbon development has made significant progress.

Since the 14th Five-Year Plan, my country's special steel industry has actively implemented the concept of green, low-carbon and high-quality development, actively carried out ultra-low emission transformation, strengthened energy management and control and extreme energy efficiency, formulated "dual carbon" goals and roadmaps, and significantly improved the level of carbon emission management. Up to now, 33 member units of the Special Steel Association, including Taigang, have completed the ultra-low emission transformation of the entire process of organized emissions, unorganized emissions, and clean transportation. 70% of member companies have completed ultra-low emission transformation in whole or in part, and the greening level of the special steel industry has been significantly improved.

In addition, mergers and reorganizations in my country's special steel industry have been steadily carried out, with typical cases such as CITIC Pacific Special Steel Group's reorganization of Tianjin Steel Pipe and Nangang Co., Ltd., and Jianlong Group's reorganization of Xining Special Steel, and the concentration of the industry has gradually increased.

However, during the 14th Five-Year Plan period, there are also many problems in the development of my country's special steel industry. First, the main business income and total profit have declined. In 2024, the main business income of member companies will reach 686.8 billion yuan, a decrease of 21.1% from 2021; the total profit will reach 7.1 billion yuan, a decrease of 86.1% from 2021. Second, the supply of high-end products is insufficient, and some high-end products still rely on imports. Compared with advanced special steel countries, the proportion of high-tech and high value-added products is still relatively low. Third, the ability of independent innovation needs to be strengthened, basic research is weak, there are few original technologies and products, and there is insufficient collaborative innovation between upstream and downstream, and the collaborative innovation mechanism is imperfect. Fourth, green and low-carbon development still needs to be accelerated, and the ultra-low emission transformation of some enterprises has not been completed, and the proportion of low-carbon products is low. Fifth, the industry order needs to be standardized, there are problems such as oversupply of low-end products and disorderly competition of products, and there are also illegal problems of inferior products in some products.

Opportunities and Challenges Facing my country's Special Steel Industry in the 15th Five-Year Plan

During the 15th Five-Year Plan period, the development of my country's special steel industry was complex and changeable. From a macroeconomic perspective, the downward pressure on the global economy has increased, but my country has advantages such as a super-large-scale market and a complete industrial system, and my country's economy is expected to grow steadily; the rise of international trade protectionism and the regionalization of economic development are obvious, and international trade is facing the pressure of slowing growth. From a policy perspective, the country attaches great importance to the development of the steel and special steel industries, and has introduced a number of policies to support the development of the special steel industry, but the green and low-carbon constraints are tightening, the intensity of ultra-low emission transformation remains unchanged, the pressure of energy conservation and the creation of energy efficiency benchmarks is increasing, and the requirements for corporate carbon emissions and low-carbon development are increasing.

During the 15th Five-Year Plan period, my country's special steel industry faces many development opportunities. With the upgrading of high-end manufacturing and the accelerated development of emerging fields, the demand for special steel in new energy vehicles, national defense and military industry, aerospace, shipbuilding and marine engineering and other fields will remain strong. The country has introduced policies to clearly support the high-end, intelligent and green development of the steel industry, which is conducive to improving the comprehensive competitiveness of the special steel industry. The country encourages increased investment in advanced manufacturing, which helps to guide resources to gather in high value-added fields and provides a strong guarantee for the development of the special steel industry. The in-depth promotion of the high-quality joint construction of the "Belt and Road" initiative will help the special steel industry to "go global", optimize the industrial layout, and enhance international competitiveness. In addition, the acceleration of the integration and coordinated development of the special steel industry will promote the deep integration of the industrial chain and create a special steel ecosystem; technological innovation and product upgrading will help break through key technical bottlenecks, develop high-end products, and adjust product structure.

At the same time, my country's special steel industry faces many challenges. At present, the steel industry has seen the phenomenon of "general to excellent, excellent to special, and special to fine". New production capacity continues to enter the special steel market, which will intensify market competition. There is still a gap between the key indicators of some special steel products and the international advanced level, and the process research and development lags behind, affecting the autonomy of high-end products. Under the "dual carbon" goal, the pressure of green transformation is high, and the cost of carbon quotas compresses profit margins. Strategic resources such as nickel and chromium have a high degree of external dependence, and supply chain risks aggravate cost fluctuations. The international market competition pattern is deeply reconstructed, developed countries reshape trade rules through "green barriers", and the EU Carbon Border Adjustment Mechanism (CBAM) will push up the additional cost of my country's special steel product exports. At the same time, India and Southeast Asian countries are accelerating the transfer of mid- and low-end special steel production capacity by leveraging their labor cost advantages, which will further squeeze the international market space for my country's special steel companies.

The enlightenment of the development experience of advanced special steel countries to the development of my country's "15th Five-Year Plan"

The development history of foreign special steel industry can be traced back to the mid-19th century, and it has gone through four stages: embryonic stage, technology accumulation stage, technology development stage and technology maturity stage. Sweden, Germany, Japan and the United States are advanced countries in special steel in the world. The proportion of special steel output in crude steel output in these industrially developed countries is generally 15% to 20%.

The development experience of these advanced special steel countries brings the following enlightenment to the development of my country's special steel industry in the "15th Five-Year Plan":

First, promote specialized production.

Through specialized production, improve the level of product refinement and specialization to meet the demand for special steel in different fields; encourage special steel enterprises to transform into "hidden champions", improve the level of product refinement and specialization, optimize product structure, enhance product technology content and added value, and enhance market competitiveness.

Second, strengthen technological innovation.

The success of the special steel industry in industrially developed countries is inseparable from continuous technological innovation and R&D investment. The special steel industry should build a full-chain system of "basic research-common technology-industrial transformation", set up special funds, increase R&D investment, promote digital twin technology, and shorten the R&D cycle.

Third, strict quality control.

The special steel industry should strengthen quality control, strictly control the entire process from raw material procurement to production, and ensure stable and reliable product performance.

Fourth, optimize the production process.

The special steel industry should focus on process optimization, adopt advanced production equipment and processes, and improve overall operational efficiency.

Fifth, actively expand the market.

The special steel industry in developed countries focuses on market diversification to disperse risks. The special steel industry should actively expand domestic and foreign markets, especially high-end markets and emerging markets.

Sixth, implement an internationalization strategy.

The special steel industry should actively participate in international competition and enhance its international competitiveness through joint ventures, overseas mergers and acquisitions.

Seventh, promote green manufacturing.

The special steel industry should focus on environmental protection and sustainable development, reduce energy consumption and carbon emissions through technological innovation and industrial upgrading, improve resource utilization, and achieve low-carbon development.

Key tasks of my country's special steel industry during the 15th Five-Year Plan

During the 15th Five-Year Plan, my country's special steel industry will enhance its core competitiveness by strengthening technological innovation, promote industrial upgrading by optimizing the industrial structure, promote green development by strengthening environmental awareness, expand development space by opening up international markets, and strive to enhance the comprehensive competitiveness of my country's special steel industry and lead the development of the global special steel industry.

From the perspective of development goals, by 2030, my country's special steel industry will have made significant progress in high-quality development, new quality productivity will be initially cultivated and formed, and comprehensive competitiveness will be greatly improved; innovation capabilities will be significantly enhanced, a number of key short-board steel varieties will be overcome, and a number of internationally leading innovative leading enterprises will be established; product structure will continue to be optimized, forming a product system with reasonable high, medium and low-end matching that fully meets different downstream needs; ultra-low emission transformation will be continuously promoted, green and low-carbon development will be fully promoted, a number of green factories, near-zero carbon enterprises, energy efficiency benchmark enterprises and low-carbon development typical enterprises will be formed, and a series of green and low-carbon products will be produced; the level of intelligence will reach a new level, and the development opportunities of AI (artificial intelligence) large models will be fully utilized to cultivate and form a number of smart workshops, smart factories, digital transformation benchmark factories, and "lighthouse factories"; formulate and revise a number of internationally leading standards, and strive to create a number of world-renowned brands. By 2030, my country's special steel industry will strive to form an industry development pattern with advanced technology, excellent quality, outstanding brand, green and low-carbon, good benefits, and strong comprehensive competitiveness, build a number of special steel strong enterprises with international competitiveness, and enter the ranks of leading countries in the global special steel industry.

During the 15th Five-Year Plan period, my country's special steel industry has the following key tasks:

In terms of improving scientific and technological innovation capabilities, enhance basic research capabilities, and proactively plan cutting-edge technology projects; increase research efforts on user technologies and establish a complete service performance database; continuously improve the innovation system, strengthen collaborative innovation between industry, academia, research and application, form an innovation consortium, and promote the transformation of technological achievements; strengthen the construction of a talent team, improve the incentive mechanism, attract and retain outstanding talents; accelerate the formation of iconic products and technologies, break through key common technologies, and develop high-performance new materials for special steels.

In terms of optimizing the structure of special steel varieties, various special steel product fields should accelerate the high-end upgrading process and actively expand application scenarios. In the field of stainless steel, efforts should be made to develop high-corrosion-resistant and high-strength products, and further broaden their application scope in new energy, construction and other fields; in the field of seamless pipes and medium and thick plates, research and develop high-end special varieties in response to the needs of energy, automobiles, ships, marine engineering, high-end equipment, construction and other fields; in the field of special steel bars and wires, development should be made in the direction of high quality and customization; in the field of special metallurgical forging products, high-tech products should be developed to strengthen the coordination of the industrial chain.

In terms of improving the quality of special steel products, we will do a good job in the high-quality research and development, production and high-end supply of special steel in key industries. For example, in terms of steel for ships and marine engineering equipment, we will focus on corrosion-resistant steel for oil tanker cargo tanks, large-scale high-grade marine engineering mooring chains, high-fracture toughness high-strength steel thick plates for marine engineering, EH690 rack steel extra-thick plates, ball flat steel, etc.; in terms of steel for transportation equipment, we will focus on high-performance spring steel, high-performance automobile suspension spring steel, integrated die-casting mold steel for new energy vehicles, high-performance fuel injection system steel, etc.; in terms of steel for energy equipment, we will focus on stainless steel for high-level waste liquid glass solidification containers, wear-resistant and corrosion-resistant bimetallic composite materials, etc. , high-performance low-temperature steel, high-strength and high-toughness oil casing with a strength of 155 kilopounds per square inch or more for ultra-deep wells of 10,000 meters, medium and thick iron-nickel-based alloy plates for photovoltaic polysilicon reactors, etc.; in terms of aerospace steel, focus on high-temperature alloy blades and blade disks for aircraft engines, deformed high-temperature alloy materials for aerospace, etc.; in terms of electronic information steel, focus on high-quality iron-nickel alloy wide strips for integrated circuits, etc.; in addition, attention should also be paid to high-performance steel-titanium composite materials, high-parameter copper-steel composite materials, high-purity iron, powder metallurgy materials, additive manufacturing spherical powders, etc.

In promoting green development, we must continue to promote ultra-low emission transformation, consolidate environmental protection achievements, and actively strive to create an A-level enterprise for environmental protection performance; scientifically formulate low-carbon development plans, continuously improve carbon emission management capabilities, increase the use of clean energy, widely apply low-carbon process technologies, and improve the level of low-carbon development; implement coordinated development of emission reduction, energy conservation and carbon reduction, and promote the transformation of energy structure and process flow.

In terms of promoting intelligent manufacturing, we will break through key core technologies and develop independent and controllable solutions; deepen digital transformation, build an industrial Internet platform, and fully tap the value of data; promote intelligent upgrading, transform production lines, and create benchmark intelligent factories; strengthen security, build a complete security system, and ensure the smooth progress of intelligent manufacturing.

In terms of guaranteeing raw material resources, we will actively develop strategic resources such as chromium and nickel that are in short supply in China, accelerate the layout of overseas resource development, and improve the domestic and foreign resource guarantee system; build a complete alloy scrap steel recycling system, reduce dependence on external resources, realize resource recycling, and improve resource utilization.

In terms of expanding overseas markets, we will vigorously expand overseas markets, strengthen international production capacity cooperation, and promote the implementation of overseas projects; actively participate in the formulation of international standards, strengthen international technical cooperation on special steel, build an exchange platform, and enhance the voice and influence of my country's special steel industry in the international market.

In terms of strengthening standard brands, we will increase the number of special steel standard formulation and revisions, and increase participation in international standards; give full play to the core role of certification, create a certification brand with international influence, and enhance the brand value and market competitiveness of my country's special steel products.

In terms of industrial chain collaboration, extend the downstream industrial chain of special steel and optimize the industrial chain of special steel equipment manufacturing; research and explore the collaborative development model of multiple metals such as titanium alloys, promote the co-production of steel and titanium, fully release production capacity potential, and promote the deep integration of the industrial chain; realize ecological collaborative development, build an industrial integration ecosystem, and form a good situation of collaborative progress between upstream and downstream of the industrial chain; realize the deep integration and efficient collaboration of the industrial chain, supply chain, and innovation chain, and build an ecosystem for collaborative development of multiple industries and cross-industries.

Relevant policy suggestions for the development of my country's special steel industry during the 15th Five-Year Plan period

In order to promote the transformation and upgrading of my country's special steel industry and build a systematic and comprehensive policy system, it is recommended that relevant national departments provide supporting policy support to ensure that various policies are effectively implemented.

First, we must give full play to the overall coordination function of the China Special Steel Enterprise Association, strengthen industry self-discipline, strengthen the cultivation of corporate integrity and contractual spirit, and work together to maintain the good trend of sustainable development of the special steel industry; give full play to the bridge and link role of the industry association, strengthen communication and coordination, reflect the demands of enterprises, and strive for national policy support; give full play to the role of the association's expert committee and provide think tank support; steadily promote the formulation and revision of group standards to provide standard support for quality improvement and technological innovation; carry out industry research, operation monitoring and market early warning to help enterprises prevent market risks; actively build an industrial docking platform, deepen upstream and downstream collaborative cooperation, and promote the deep integration of the industrial chain.

Secondly, it is recommended that relevant departments increase their support for the development of the special steel industry and encourage the special steel industry to take the path of specialized, refined, special and new professional development. It is recommended that the state arrange special funds to support key scientific and technological research projects of special steel new materials; in the capacity replacement work of small-batch and multi-variety equipment transformation of special steel, adopt a "one-issue-one-discussion" approach to avoid a "one-size-fits-all" policy. For example, the small electric furnaces and other related equipment and production links required for the production of high-temperature alloy capacity replacement should be included in the scope of precise support. At the same time, it is recommended to accelerate the construction and improvement of an effective exit mechanism for excess capacity, prevent disorderly competition and vicious "involution" caused by blind expansion of the industry, and create a standardized and orderly market environment for the development of the industry.

Finally, improve resource guarantee capabilities, establish a diversified raw material supply system for special steel; strengthen the development of strategic mineral resources such as chromium and nickel; support the establishment of an alloy scrap steel recycling system; ensure the smooth import of scrap steel channels; establish a strategic reserve system to ensure a stable supply of raw material resources.

The "15th Five-Year Plan" is about to begin, and the special steel industry shoulders heavy responsibilities and has a bright future. The special steel industry should actively learn from advanced foreign experience, closely combine its own development reality, and solidly implement development ideas and key tasks. Special steel enterprises should find their correct positioning, take the road of specialization and innovation, firmly grasp the main line of high-end, professional, green, intelligent, and international development, unswervingly promote scientific and technological innovation, optimize the industrial structure, and write a new chapter in the high-quality development of the special steel industry.