Baogang-A Strong Force on World's Steel Market

This inspiring news has spread out from Baogang Steel Group: through 12 years' efforts made in developing its international market, Baogang's (Baoshan Iron and Steel Group's) overseas market share has increased steadily, its export of rolled steel has topped 10 million tons.

By March 27, its export of iron and steel products had totaled nearly 10.09 million tons, earning it US$3.05 billion in foreign exchange.

At present, Baogang's customers are scattered in 33 countries and regions including Japan, the Republic of Korea (ROK), Europe, and the United States, its products have covered such high value-added fields as car manufacturing, shipbuilding and petroleum exploitation, it has become a significant force in the world market.

The release of this news has immediately evoked reaction from the international iron and steel market. As is well known, although currently China is the largest iron and steel producer in the world with an annual steel output of 100 million tons. However, it is also one of the largest steel importers who needs to bring in 10 million tons a year. In the past, enterprises of steel powers such as Japan and the ROK, had to consider how to compete with superior State-owned enterprises such as Baogang in the Chinese market, but now, in several rounds of trial of strength recently on the international steel market, Baogang repeatedly defeated its giant counterparts in Japan, the ROK, Germany and some other countries, Baogang has won the bids in the projects of laying oil (gas) pipelines in Israel, Russia, India, the Sudan and Venezuela, this has undoubtedly made these traditional steel powers feel the pressure brought upon them.

In fact, this has been the second "impact" exerted on the international steel market by the news from Baogang within one month. On February 28, after the cable on the ground of a vertical well of the No.3 converter was bitten by a small animal, the heating and burning of the converter caused a fire, leading to the suspension of production for a while in Baogang. As soon as this news spread out, the prices of Baogang-related steel products soared in the international steel market. Some foreign steel enterprises were even ready to fill the "gap" in the domestic needs of iron and steel caused by the suspension of production in Baogang. But they were disappointed for finding no loophole to exploit, at midnight of March 8, Baogang's first converter resumed production, this was followed suit by its second converter on the night of March 24. At this point, production was resumed in Baogang in an all-round way. At present, the daily output of the first converter has returned to the normal level of 8,880 tons. Xu Daquan, board chairman of the Shanghai Baogang Steel Group, said that the incident did not exert too much influence on its production and honor of contracts, when production is organized according to the current level, Baogang will reap a further 15 percent increase of profits on the basis of the previous year's 1.5 billion yuan in the whole year of 2000.

Although the two "shocks" are different in content, they reflect the same fact: the superior steel enterprises of the largest steel producer in the world are not contented with acting a "secondary role" on the international market, they are striving to play a "leading role" with a say in related matters. This kind of self-confidence comes from their own tremendous strength. In recent years, Baogang has pursued a strategy of not "grabbing rice bowls" with its domestic counterparts, but instead of contending for markets with its foreign rivals. In order to enhance its competitiveness, Baogang has raised more than 60 billion yuan of funds to construct its third-phase project centered on the production of tin plates, silicon steel and other hi-tech and high value-added products. On the premise of guaranteeing quality, the construction period of the third-phase project will be shortened by 8 to 10 months on the average. At present, the per-unit output of the third-phase project 1580 hot-rolling and 250-ton converter steel-making has exceeded the designed level. Currently, the third-phase project with the world first-class equipment has become the "trump card" with which Baogang participates in international competition.



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