What challenges will China's steel industry face in 2019

First, the external environment has undergone profound changes. Since this year, the trend of global economic differentiation has been obvious. The US economy has gradually strengthened under the stimulation of expansionary fiscal policy and tax reform. The economy of the euro area is generally weak. Emerging market economies are suffering from the tightening financial environment and capital outflow under the impact of the strong appreciation of the US dollar.

Second, the marginal effect of supply-side reform is weakened. Thanks to the supply-side dividend, steel prices have rebounded sharply in the past two years, corporate profits have been repaired, and the whole steel industry has ushered in new opportunities for development. It can be said that the easing of supply-demand contradictions and steel price rebound are the source of improvement of the whole steel industry. But as the task of capacity removal approaches completion, the marginal pull effect of supply-side on price will be reduced. Next, if we want to maintain stable and high-quality development, we need to rely more on the endogenous power of steel industry development.

Thirdly, the endogenous power of high-quality development of the steel industry needs to be strengthened. There are some problems that affect the strength of steel industry, such as investment in innovation, technical equipment, inadequate investment in environmental protection facilities, and unreasonable product structure.