Executive Interviews

Asian Metal: Mr. Li, thank you for joining us today. Could you briefly introduce the development history of the company and its facilities?

Mr. Li: It’s my pleasure. Taihang Steel Group is a large-scale heavy industry group centered on steel, with a complete industrial chain. After nearly 20 years of development, it has grown into a diversified private conglomerate, ranking among China’s Top 500 Enterprises, Top 500 Manufacturers, and Top 500 Private Enterprises. Currently, the Group owns two steel subsidiaries—Hebei Taihang Iron and Steel Group Co., Ltd. and Yangzhou Hengrun Offshore Heavy Industry Co., Ltd.—while also extending into energy, utilities, heating, real estate, non-metallic materials, scrap processing, automobile dismantling, and logistics, forming a “2+8” business structure (two production bases and eight non-steel industries). Hebei Taihang Iron and Steel Group Co., Ltd. is one of the two major production bases. The company has total assets of RMB 35 billion, registered capital of RMB2.18 billion, and over 7,000 employees. Its facilities include one coking and power generation unit with an annual capacity of 1 million tons, two 1,520m3 blast furnaces, one 1,200m3 blast furnace, two 120-ton converters, one 100-ton converter, two HRC production lines (1,780mm and 1,700mm ESP), one pickling-galvanizing-aluminum-magnesium combined line, and four high-speed wire rod lines. Notably, the ESP lines are two of the most advanced among just nine worldwide, and the first globally to achieve mass production of ultra-thin hot-rolled strip at 1,500mm width and 0.7mm thickness. The combined pickling and galvanizing line is also the world’s first to use ESP hot-rolled thin sheet as substrate. Our products are mainly supplied to Beijing-Tianjin-Hebei, Shandong, Henan, and East China, serving key customers in standard fasteners and sheet processing industries.

Asian Metal: How was downstream demand for sheet products in the first half of this year? Do you see signs of recovery in Q3, and what’s your outlook for Q4?

Mr. Li: In the first half, as prices steadily declined, downstream customers reduced purchasing activity. Meanwhile, export volumes fell sharply due to overseas tariffs, leading to a 20–30% year-on-year drop in domestic demand. July and August are traditionally the off-season for steel sales, with high temperatures in the north and monsoon rains in the south further reducing demand by another 10–20%. Since early September, as extreme weather has eased, we’ve seen a recovery, particularly in the auto and home appliance sectors. We expect demand in Q4 to rebound by 10–20%.

Asian Metal: What has been your capacity utilization rate this year?

Mr. Li: With profits at RM 200–300/t, our operations have been running at near full capacity, with no short-term plans for maintenance shutdowns. Given that our equipment exceeds national standards, environmental impacts are minimal. However, over the past two years, when margins were negative, our operating rate was lower.

Asian Metal: HRC prices in China fell steadily from February to May, stabilized in June, rebounded in July, and have weakened again since mid-August. What do you think caused this trend?

Mr. Li: From February to May, tariffs and anti-dumping measures overseas hurt both direct and indirect exports, dragging down downstream demand and leading to price declines. In June, raw materials such as coal and coke stabilized, strengthening cost support for finished products. During this policy lull, market participants adopted a wait-and-see approach. After four months of declines, expectations for a rebound also grew. However, with weak demand, the price recovery was limited, though downside was also capped by costs, resulting in consolidation. In July, confidence was boosted by favorable news, including “anti-involution” measures, crude steel output reduction, and the Yarlung Tsangpo hydropower project, pushing prices higher. Entering August, weaker-than-expected environmental curbs and sluggish downstream demand amid hot and rainy weather caused prices to ease again.

Asian Metal: What is your outlook for HRC prices in Q4?

Mr. Li: With extreme weather receding and overseas tariff impacts moderating, we expect downstream demand to bottom out and recover in Q4. Favorable policies also have room to take effect, while crude steel reduction measures will gradually be implemented. We therefore anticipate a moderate rebound of RMB100-200/t in HRC prices.

Asian Metal: How has your company advanced green transformation? And how is the capacity utilization of your pickling-galvanizing-aluminum-magnesium line?

Mr. Li: We use imported ESP endless strip production lines with high efficiency and low energy consumption, reducing energy use by about 40% and emissions by 65–70% compared to traditional hot-rolled mills. The pickling-galvanizing-aluminum-magnesium line uses ESP hot-rolled strip as substrate, integrating both processes for high efficiency and lower cost. It represents a green, efficient deep-processing technology for hot-rolled thin strip. Apart from routine annual maintenance and the Spring Festival holiday, this line operates at near full capacity, producing 50,000–55,000 tons per month, with a design capacity of 60,000 tons/month. As downstream deep-processing lines ramp up, our hot-rolled coil output has decreased from 200,000 tons to the current 40,000–50,000 tons.

Asian Metal: Looking ahead to 2025, steel mills face both opportunities and challenges. How do you view the current environment, and what are the company's strategies for the future? Are there plans for new or upgraded production lines?

Mr. Li: The fundamental issue of overcapacity remains, with supply exceeding demand and the industry entering a survival race. To stay competitive, we must reduce costs, improve efficiency, and enhance market competitiveness. While we do not plan to add new production lines in the coming years, we will continue to increase the share of high value-added specialty steel while reducing ordinary steel from the current 14% to below 10%, in order to improve profitability.

Asian Metal: Thank you, Mr. Li, for sharing your insights. We wish Taihang Iron and Steel continued success.

Mr. Li: Thank you.