-Speech at the Fourth Executive Council (Enlarged) Meeting of the Eighth China Refractive Materials Association

Chinarefractory materialIndustry Association President Zhao Jizeng

(23 September 2020)

Hello, presidents, directors, members and members:

The fourth executive director (enlarged) meeting of the eighth session of the association was held today in Tangshan, an important industrial town in the north. The new coronary pneumonia epidemic in 2020 has had a huge impact on all walks of life, and the refractory industry is facing unprecedented challenges and difficulties. At today's meeting, we gather together to face difficulties and challenges, analyze the market environment facing the industry, exchange and discuss how to innovate the competitive form of the industry, adhere to innovation and leadership, and jointly embark on a road of high-quality development of the industry. Just now we listened to the analysis report on the situation of China's iron and steel industry made by the leaders of the Iron and Steel Association. The report is rich in content, detailed in data and wonderful in analysis. So that we have a clearer understanding of the next step in the development of the steel industry. Vice President Li Yongquan reported to the General Assembly the production and operation of the refractory industry and upstream and downstream industries in the first half of 2020, and pointed out some problems that should be paid attention to in the operation of the industry. Secretary-General Chai Junlan reported on the work of the Association in the first half of 2020 and the work arrangements in the second half of 2020. In the speeches at the meeting, everyone spoke freely and expressed their opinions, and put forward many valuable opinions and suggestions for the high-quality development of the industry. These suggestions have a good guiding effect on the development of the industry. Next, I would like to make some comments on the situation of the industry and the work of the association in the second half of the year. Please discuss them.

1. the operation of the refractory industry in the first half of 2020.

The overall operation of the (I) industry is stable, and the output has declined slightly compared with the same period last year, but the efficiency of the enterprise is far less than that of the same period last year.

According to the Association, the national production of refractory materials in the first half of 2020 was 10.4822 million tons, down 13.75 percent from the same period last year. Among them, 5.6107 million tons of dense shaped refractory products, down 16.34 from the same period last year; 4.5596 million tons of amorphous refractory products, down 11.51 from the same period last year. The association conducted a statistical analysis of the operating conditions of 76 key enterprises. In the first half of this year, the output of refractory materials of 76 enterprises fell by 12.35, sales revenue fell by 9.19, profits fell by 39, taxes paid fell by 28.25, and accounts receivable rose by 6.26. The above results compared with the same period last year, the operating situation declined seriously. The refractory industry is facing great pressure, many challenges, fierce competition and complex market pattern.

(II) affected by the spread of foreign epidemics, refractory raw materials and refractory products export volume prices fell.

From January to June 2020, the export volume and export price of refractory raw materials (except graphite and browncorundumexternal) have declined to varying degrees. Among them, the export volume decreased by 4.76 percent year-on-year, the export trade volume decreased by 18.28 percent year-on-year, and the comprehensive average export price decreased by 14.2 percent year-on-year. Among them, the export volume of refractory raw materials decreased by 2.40, the export volume decreased by 15.53, and the average export price decreased by 13%. The export volume of refractory products decreased by 10.80, the export trade volume decreased by 21.63, and the average export price also decreased significantly. Considering the severity of the epidemic abroad and the fact that foreign steel production has fallen sharply, the export situation in the first half of the year is not too bad. However, due to the extension of the time dimension of the spread of the epidemic abroad, the lag effect on the export of refractory materials gradually appears. The return of some export capacity to the domestic market has exacerbated the negative impact of domestic overcapacity to some extent.

(III) unite and resolutely win the battle of epidemic prevention and control, epidemic prevention and control has become a normal work in 2020.

In the face of the sudden outbreak of new crown pneumonia, the association and the whole industry resolutely implement the spirit of General Secretary Xi Jinping's important instructions, and earnestly implement the decision-making and deployment of the Party Central Committee, the State Council, the SASAC, the China Iron and Steel Industry Association, and the local governments where the enterprises are located. All enterprises have established and improved their own prevention and control system. While doing a good job in scientific prevention and control of the epidemic, they strive to ensure the operation of production and operation of enterprises, and try their best to provide guarantee for the production and operation of steel, building materials, nonferrous metals, petrochemical and other high-temperature industries. During the epidemic period, there was no accident of production and waiting for production in downstream steel and other industries due to refractory supply problems. The association in the first time to mobilize the whole industry to actively contribute to the Wuhan epidemic front line and around the epidemic prevention work donations. Various enterprises responded positively, and many entrepreneurs gave generously, and the total value of donations and materials in the whole industry was about 4300 million yuan. In the work of anti-epidemic and epidemic prevention, resumption of production, and ensuring the supply of refractory materials for key users, many touching deeds have emerged, and the mission and responsibility of refractory people have been written. The Association has reported and praised the relevant deeds in China Metallurgical News and China Building Materials News in a timely manner. At present, the domestic epidemic control has achieved significant results, the majority of enterprises are also continuing to do a good job in the prevention and control of the epidemic at the same time, to do a good job in daily production and operation. However, due to the severity of the foreign epidemic, the workload of external anti-import and internal anti-proliferation is still very large, the majority of enterprises should continue to take epidemic prevention and control as a normal work in 2020 to grasp, tighten the string of epidemic prevention and control is not relaxed, to protect the safety and health of workers, and consolidate the hard-won results of epidemic prevention and control.

The current refractory industry in 2. is facing severe difficulties, but also in the era

In recent years, the country has promoted the economic development mode from high-speed growth to high-quality development, which also provides important development opportunities for the refractory industry. To achieve high-quality development, supply-side structural reform is the main line, improve industrial concentration, oppose the expansion of production capacity, large and small enterprises dependent development is our common task. After the outbreak of the epidemic, the Central Committee of the Communist Party of China put forward the "six guarantees" and "six stability" for economic work ". It is required to treat the development and changes of the situation with dialectical thinking and enhance confidence in winning. It is required to be good at turning external pressure into a powerful driving force for deepening reform and expanding opening up, and concentrate on doing our own affairs well.

(I)Industry overcapacity situation is more severe, the competition pattern is complex and changeable

The focus of supply-side structural reform is quality change and efficiency change. The main task is to vigorously break the ineffective supply and vigorously cultivate new kinetic energy. Reduce the explicit and hidden costs of the real economy. These macro policy measures are conducive to the development of the real economy and are very close to the actual situation of our industry. In this environment, many of our enterprises, especially some advantageous enterprises, actively promote supply-side structural reform, actively promote industry joint restructuring, and actively implement the concept of green manufacturing and intelligent manufacturing. In recent years, many of our enterprises have made a lot of capital investment and technological transformation projects. The construction of many projects is necessary, which has greatly changed the overall appearance of the refractory manufacturing industry.

At the same time, the environmental governance promoted by the state and local governments at all levels has also created a good market environment for our industry. With a large number of illegal "scattered, chaotic and polluting" enterprises being eliminated, a number of inefficient production capacity has been cleared, which has played an important role in purifying the market environment of the industry, gradually standardizing the competition in the refractory industry, and gradually returning to the comprehensive competition in technology, quality, service, management and so on. During this period, there were also a number of successful cases of mergers and reorganizations between enterprises, forming a number of advantageous enterprises and leading enterprises. These are conducive to the healthy and stable development of the industry.

But unfortunately, due to historical reasons and the characteristics of our industry, the base of overcapacity in our industry is very large, and the elimination process of backward production capacity is still slow. In recent years, the progress of equipment technology and the commissioning of new projects have released a large new capacity in a relatively short period of time. The superposition of these factors has caused serious overcapacity in the refractory industry today, and the market competition pattern is very complex.

The first is that the market price of raw materials has dropped significantly, and a large number of newmagnesiaThe release of production capacity led to oversupply in the magnesia market, and the price of magnesia fell back to the original position of the price in the first quarter of 2017.

As a result of the epidemic, the foreign steel market shrank by about 17%-18% in the first half of the year. The market on the export demand side of refractory materials has undergone major changes, resulting in the return of some export capacity to the domestic market, further exacerbating the overcapacity of refractory raw materials and refractory products. Some enterprises in order to maintain market share, "below-cost competition" means in the market repeatedly appeared.

At present, the overall sales profit level of the industry is not optimistic, and everyone should be prepared for difficult days. Under the background of no major changes in the output of downstream markets such as steel, building materials and non-ferrous metals, the downward price of refractory raw materials has failed to improve the marginal contribution of refractory products to operation and production. This only shows that our industry has serious overcapacity, low industry concentration and very weak market stability factors.

Around the country, structural contradictions in the economy are highlighted, and there are many difficulties in the real economy. The operating pressure of steel enterprises increases, the profit level decreases, and the price transmission effect increases, which brings great pressure to our refractory enterprises. In the current complex situation at home and abroad, how to deal with the challenges faced by the refractory industry and maintain the healthy operation and development of the industry has put forward higher requirements for all enterprises.

(II) Adhering to Innovation and Leading, Accelerating the Upgrading of Industrial Structure

The application range of refractory materials is relatively specific, and it is highly dependent on downstream industries such as steel, building materials and chemicals. Production increases in downstream industries such as steel will be limited in 2020 and will not change significantly. Affected by the epidemic, the overall surplus of domestic refractory materials and structural surplus will be further intensified, and the competition for market share will shift from incremental competition to stock competition. How to make the refractory industry into the track of sound development, adhere to the supply side structural reform, adhere to the innovation lead, accelerate the upgrading of industrial structure is the only answer and way out.

To adhere to the innovation lead. First of all, the production of traditional refractory products to achieve green, functional, longevity. The traditional product manufacturing process should be changed to green manufacturing and intelligent manufacturing mode. It is necessary to aim at the goal of energy saving and consumption reduction of products, and earnestly implement the emission standards formulated by governments and industries at all levels. In recent years, the regional contracting model of the steel industry has forced us to transform from a single product manufacturer to a business model of product manufacturing and integrated service providers, which has greatly improved the management level of enterprises in the industry and optimized the team structure of enterprises. As a customer-oriented comprehensive solution integrated service provider, it is inevitable that our internal management model should be adjusted greatly, and the level of our enterprise team should be higher. Enterprises are required to have good innovation ability, design ability, financial strength and management level. In November 2019, 15 national departments jointly issued the "Implementation Opinions on Promoting the Deep Integration of Advanced Manufacturing and Modern Service Industries", and various departments subsequently issued supporting policies and rules, and promoted pilot projects. This is an upgraded version of the national "integration of the two". Our refractory enterprises have made certain achievements in this respect, but there is still a lot of work to be done. All enterprises should actively respond to and follow up. I believe this is the general trend and direction of the industry.

The transformation of enterprise innovation mode. We are required to shift from monomer technology innovation to process, technology, equipment, use and maintenance of the whole process innovation. There is not only the transformation of innovation mechanism, but also the support of innovation team. In the process of innovation and development, enterprises should attach great importance to the role of talents, especially young talents, and should specially study and formulate policies and measures to train and introduce innovative talents, so as to absorb more outstanding talents into the refractory industry. The association and the association's expert committee also have a lot of work to do in personnel training.

(III) support the joint reorganization of enterprises and jointly maintain the competitive environment of the refractory industry.

For a long time, the refractory industry is a fully competitive industry, and most enterprises are in a state of meager profit or loss. The reason is that the scale of the enterprise is small and it is difficult to form a scale effect. Then there is the large number of market competitors, irregular competition and price wars that lead to large market fluctuations. Steel, building materials, nonferrous metals and other industries in the downstream of refractory materials are also eliminating backward production capacity and industrial upgrading, and the demand structure is also upgrading. Objectively, refractory enterprises need to be reorganized to become bigger and stronger. On the basis of giving priority to benefits and mutual benefit and win-win results, a number of leading enterprises should be formed, and "size depends on each other", so as to fundamentally put an end to "competition below cost" and promote the high-quality development of the industry.

There is no winner in the price war, which not only damages the interests of refractory enterprises, but also is extremely unfavorable to the development of downstream industries in the long run. I hope that the association can make a difference in the guidance of market competition behavior. The association should further promote the implementation of the Ministry of Industry and Information Technology's "Several Opinions on Promoting the Healthy and Sustainable Development of the Refractory Industry" and the "Standard Conditions for the Refractory Industry", continuously improve the industry self-discipline mechanism, standardize industry market behavior, promote fair competition, and create conditions to actively guide The industry develops in coordination, guides industry self-discipline, and does not fight price wars, the refractory industry into the track of sound development.

3. on the work of the Association in the second half of the year

Since the change of the eighth Council of the Association, especially during the epidemic, the Association, under the leadership of the Party Construction Bureau of the SASAC and the Party Committee of the China Steel Association, with the support of all member units, has carried out a series of fruitful work and achieved results that should be praised. Our provincial and municipal industry associations have done a lot of fruitful work under the conditions of limited support and difficult work, which has played an important supporting role in the work of China Refractory Industry Association. Here, I would like to mention the Zhejiang Refractory Industry Association in particular. They are active and have acted as a bridge and link between enterprises and local governments, and have made outstanding achievements in making local traditional advantageous industries stronger and bigger. People in the industry spoke highly of it.

Next, I will put forward some requirements and ideas for the work of the association in the second half of the year.

(I)Conscientiously do a good job in the preparation of the "14th Five-Year Plan" for the refractory industry.

General Secretary Xi Jinping recently gave important instructions on the preparation of the country's "14th Five-Year Plan", emphasizing that the preparation and implementation of the five-year plan for national economic and social development is an important way for our party to govern the country. The preparation of the plan should open the door to ask questions and draw on collective wisdom, unify the strengthening of top-level design and the insistence on asking and planning for the people, encourage the broad masses of people and all sectors of society to make suggestions and suggestions for the 14th five-year Plan in various ways, and earnestly absorb social expectations, wisdom of the masses, expert opinions, and grass-roots experience into the preparation of the 14th five-year Plan, and make concerted efforts to prepare the 14th five-year Plan. At present, the Party Central Committee is organizing the formulation of proposals for economic and social development plans for the 14th Five-Year Plan period.

The refractory industry is characterized by a wide range of product applications, a wide variety of structures and production processes, a huge number of market competitors, low industrial concentration, and prominent overcapacity. Our industry needs a good industry "14th Five-Year Plan" development plan, planning as a top-level design to achieve the healthy development of the industry will have a certain guiding role. Our plan should tell enterprises what we advocate and what we oppose. We must clarify the development status of the industry, carefully summarize the results of the "13th Five-Year Plan" development, and carefully study the gap between our industry and foreign counterparts; we must clarify the development goals of the industry and find out the problems in the industry; we must guide The high-quality and healthy development of the industry.

The Expert Committee of China Refractory Industry Association intends to launch the "China Refractory Industry Association" in the near future.refractory material industryThe preparation of the "14th Five-Year Plan" development plan proposal. It is hoped that the experts will work together and strive to compile a guiding "China's refractory industry" 14th Five-Year Plan "development proposal.

(II)Seriously do a good job in the association established 30 years of industry development results summary work

This year the association's thirtieth anniversary. The past thirty years have also been the thirty years of rapid development of China's refractory industry. Many of these achievements and achievements deserve to be summarized and commended. Due to the epidemic, it is difficult to organize the commemorative activities related to the association's thirty years this year. After research, the association plans to hold a seminar on "30 years of rapid development of the industry" at an appropriate time next year to commemorate the event. Please organize the relevant preparatory work. All local associations and enterprises are also invited to make suggestions and suggestions, and all enterprises actively cooperate to jointly make preparations for the commemorative activities.

(III)Further strengthen the construction of the association's statistical work network system and improve the level of statistical analysis of the association's industry.

Industry research and industry statistics are an important starting point for the work of the association, and an important means and condition for serving the government and member enterprises. After the change of the association, the association began to improve the level of the statistical system. The association should overcome the difficulties of the epidemic, take more time to investigate enterprises, listen to the voices of enterprises, visit local governments in the main refractory producing areas, and innovate the working methods of the association. Better play the role of the association as a bridge. To further improve and enhance the existing statistical system of the association, it is necessary to organize small-scale symposiums and seminars in a timely manner in view of the hot and difficult problems existing in the development of the industry, so as to guide the problems existing in the industry and the needs of enterprises. at the same time, actively reflect the problems existing in the industry and enterprises to the relevant state departments and strive for support at the national policy level.

We should pay attention to the role of local refractory industry associations. To further strengthen the working contact with the associations of various provinces and cities (counties), the China Nai Association should play a leading role in the national academic exchanges, technical training and exhibitions in the industry. When local associations hold national industry conferences or activities, they should take the initiative to communicate with the China Refractory Industry Association in a timely manner to support each other and develop together.

Fellow directors, delegatesIn the face of the complex and volatile economic situation at home and abroad in 2020 and the huge impact of the new coronary pneumonia epidemic, the industry's difficulties and opportunities are the same. I hope you will strengthen your confidence, actively respond, unify your thoughts and actions into the central government's decision-making and deployment on the current epidemic prevention and control and economic and social development, meet new challenges, never forget your original intention, keep your mission in mind, and strive to grasp the window period for upgrading the refractory industry in the next few years. While doing a good job in the prevention and control of the new coronary pneumonia epidemic, we will steadily push forward all kinds of work. I urge everyone to pay more attention to the association and support its work. With the association as a link, coordinated development will make new contributions to promoting the high-quality development of China's refractory industry. (End) 【China Refractory Network]]