Jaway Stainless Steel

Chinese steel sector to tap huge potential in special steel market

According to steel industry 12th five year plan it specifies that special steel should focus on the fields of high speed rail, urban rail transport, marine engineering, offshore oil exploration, shipbuilding, energy saving vehicles, high voltage power grid etc.

As estimated, the total investment may arrive at CNY 10 trillion in the fields of large aircraft, high speed rail, marine and other high end equipment etc.

Data shows that about 35 million tonnes of special steel have been produced in 2009 accounting for only 5% of the total output which is much lower than that of developed countries. At present, our country special steel mainly aims at moderate and low end products, for high end special steel accounts for less than 7%, far below the line of 30% in Japan, therefore, the future of China high end special steel is quite prospective.

High end equipment will become the driving force for the development of special steel. The four biggest special steel groups will benefit the most for they have their special steel technology and orders. Industry analysts suggest focusing on Fushun Special Steel and Taiyuan Stainless Steel.

The reasons are as follows

1. The former one is relying on its big shareholder, China Northeast Special Steel Group, and supporting materials for defense and military industry. Its market shares of tool and die steel, gear steel, alloy bearing steel are 40%, 35% and 40% respectively.

2. The latter one is the domestic leading stainless steel company and has become the greatest steel suppliers with the most completed stainless steel industry chain. Currently, the technology of special silicon steel has made a breakthrough, which means there is a huge potential for future development.