The problem of overly rapid growth in production capacity

Over the past five years, the average growth rate of stainless steel output in China has reached 45.4%. Considering the large scale of ongoing projects, this high-speed growth trend will continue. However, the growth rate of stainless steel consumption in 2005 compared with that in 2004 was only 16.8%. It should be said that a production capacity of 10 million tons is in line with the future stainless steel market in our country. If the production capacity is further expanded, problems such as oversupply, serious waste of investment and difficulties in resource supply will arise. From a global perspective, due to changes in supply and demand, the prices of nickel and chromium have risen sharply. Existing stainless steel plants in Japan and other countries have reduced production, and POSCO of South Korea has postponed the implementation of the originally planned new cold-rolled stainless steel strip project. All these indicate that it is necessary for China to suspend the proposed stainless steel projects.

2. The shortage of nickel-chromium resources:

The strong demand has driven the rapid expansion of stainless steel production capacity in our country. However, the expansion of stainless steel production capacity has led to a shortage of raw materials (mainly nickel and chromium resources). From the perspective of China's stainless steel industry, in 2006, China's refined nickel output is expected to be 130,000 tons, while the consumption is expected to reach 237,000 tons, with a supply gap of 107,000 tons.

China is a country lacking nickel and chromium resources. The competition among countries around the world for the control of the development of nickel and chromium resources is fierce. Therefore, the supply of nickel and chromium resources is an important limiting factor for the development of stainless steel production in China. The suggested measures are:

Intensify the exploration and development of domestic nickel and chromium ore resources, and strive to ensure a greater supply of nickel and chromium resources.

(2) Actively participate in the development of nickel and chromium resources abroad. For instance, Baosteel Group and Jinchuan Group agreed to jointly invest 1 billion US dollars to resume production at the Nornok nickel refinery in the Philippines.

(3) Develop and utilize low-chromium nickel ore resources to increase the supply of nickel and chromium resources. China itself, especially the neighboring Southeast Asian countries such as Indonesia and the Philippines, have a large amount of low-nickel-chromium laterite deposits that are yet to be developed and utilized.

(4) Conduct technological breakthroughs and develop nickel-saving stainless steel. Approximately 76% of the global stainless steel production belongs to the 300 series. Therefore, fluctuations in nickel prices can significantly affect the price of nickel-chromium stainless steel. Moreover, in recent years, the price of nickel raw materials has soared, which has relatively made the cost of nickel-chromium stainless steel relatively high. Thus, the development of chromium-based stainless steel and low-nickel stainless steel is of great significance.

3. Issues with 200 series stainless steel:

In recent years, the high nickel price has led to a rapid increase in the market share of 200 series stainless steel. Currently, the market share of 200 series stainless steel in China has risen from 5% three years ago to 20%. Depending on the nickel content, 200 series stainless steel has different grades. Meanwhile, each country and enterprise also has its own grades. The two grades of stainless steel initially developed by the United States, 201 and 202, both have a nickel content of around 4%. Although their corrosion resistance is slightly inferior to that of the 300 series, they can still replace the 300 series in some fields. However, during the development of the 200 series stainless steel, a series of problems emerged.