220
L. Ren et al.
2015, China’s iron and steel industry consumed 639.51 Mt of standard coal, or 14.9%
of total energy used nationwide, of which coal and coke combined stood at around
89.9% while electricity and natural gas at 10.1%. Over the last decade, the share of
iron and steel industry in the country’s total energy consumption ranged between
14.9 and 19.4%, an annual average of 16.6%. The progress of industrialization and
urbanization in China is expected to be accompanied by surging energy consumption
of the industry and consequently, mounting pressure of GHG emissions (Liu 2016).
The preceding paragraphs have revealed the following traits of China’s iron
and steel industry:
(1) Rapid development. For several consecutive years, China has topped the world
in annual iron and steel output and is capable of producing over 1000 varieties
of steel, and rolling and processing over 40,000 different specifications of steel
products. Meanwhile, the conformity rate of products has reached 85%, with
the quality of some products measuring up to advanced international standards.
(2) Swift upgrade of production processes. China’s iron and steel industry is seeing
continuous technical innovation, phasing out obsolete technologies and outdated
installations, as evidenced by the elimination of open-hearth steelmaking in all
steel plants.
(3) Bright prospects thanks to China’s growing economy and world economic
recovery, and the government macro regulation and control of the industry plays
a key role.
On the other hand, however, China’s iron and steel industry is not without its
weaknesses:
(1) The deconcentrated industrial footprint falls short of the demands of economy of
scale. Among the existing steel plants in China, only 70 have an annual output
of over 1 Mt. In contrast, almost all the iron and steel production in France
is managed by one company—Usinor. This demonstrates China’s insufficient
concentration of production compared to developed countries, which, in some
measure, eroded the international competitiveness of China’s iron and steel
sector.
(2) Lack of technical specialization. Currently, iron and steel enterprises in China
are capable of producing a wide spectrum of products with all specifications and
types, but very few flagship products are offered, and the market segmentation
remains rather fuzzy at the national level due to a lack of technical specialization.
In comparison, specialized division of labor is crystal clear in most iron and steel
plants in developed countries, with market segmentation basically shaped among
producers on the national level and even worldwide. The obsolete technical
equipment in steel and iron industry in China and insufficient concentration and
specialization have resulted in the alarming inefficiency and high cost of iron
and steel products in China.
(3) The gap in overall quality of the industry does not only exist between China
and developed countries but also with developing countries in terms of cost
L. Ren et al.
2015, China’s iron and steel industry consumed 639.51 Mt of standard coal, or 14.9%
of total energy used nationwide, of which coal and coke combined stood at around
89.9% while electricity and natural gas at 10.1%. Over the last decade, the share of
iron and steel industry in the country’s total energy consumption ranged between
14.9 and 19.4%, an annual average of 16.6%. The progress of industrialization and
urbanization in China is expected to be accompanied by surging energy consumption
of the industry and consequently, mounting pressure of GHG emissions (Liu 2016).
The preceding paragraphs have revealed the following traits of China’s iron
and steel industry:
(1) Rapid development. For several consecutive years, China has topped the world
in annual iron and steel output and is capable of producing over 1000 varieties
of steel, and rolling and processing over 40,000 different specifications of steel
products. Meanwhile, the conformity rate of products has reached 85%, with
the quality of some products measuring up to advanced international standards.
(2) Swift upgrade of production processes. China’s iron and steel industry is seeing
continuous technical innovation, phasing out obsolete technologies and outdated
installations, as evidenced by the elimination of open-hearth steelmaking in all
steel plants.
(3) Bright prospects thanks to China’s growing economy and world economic
recovery, and the government macro regulation and control of the industry plays
a key role.
On the other hand, however, China’s iron and steel industry is not without its
weaknesses:
(1) The deconcentrated industrial footprint falls short of the demands of economy of
scale. Among the existing steel plants in China, only 70 have an annual output
of over 1 Mt. In contrast, almost all the iron and steel production in France
is managed by one company—Usinor. This demonstrates China’s insufficient
concentration of production compared to developed countries, which, in some
measure, eroded the international competitiveness of China’s iron and steel
sector.
(2) Lack of technical specialization. Currently, iron and steel enterprises in China
are capable of producing a wide spectrum of products with all specifications and
types, but very few flagship products are offered, and the market segmentation
remains rather fuzzy at the national level due to a lack of technical specialization.
In comparison, specialized division of labor is crystal clear in most iron and steel
plants in developed countries, with market segmentation basically shaped among
producers on the national level and even worldwide. The obsolete technical
equipment in steel and iron industry in China and insufficient concentration and
specialization have resulted in the alarming inefficiency and high cost of iron
and steel products in China.
(3) The gap in overall quality of the industry does not only exist between China
and developed countries but also with developing countries in terms of cost