Specialty New Materials

CITIC Pacific Special Steel mainly produces bars, plates, seamless steel tubes, forged steel, wires and casting billets for customers in the auto components, energy, machinery manufacturing, oil and petrochemicals, transport, shipbuilding and other industrial sectors. Its products are sold in China and exported to more than 60 other markets, including the US, Japan, Europe and Southeast Asia.

Year in Review

In 2023, the steel industry experienced a widespread downturn cycle and faced various economic challenges. These included a lacklustre recovery in downstream demand, declining steel prices, and soaring raw material costs. The industry continued to operate in a challenging environment characterised by high costs and low profits against a backdrop of strong supply and weak demand. Overall, the industry’s performance remained at an historically low level, and the business outlook was highly challenging. According to statistics from the Special Steel Enterprises Association of China, the total profit of key special steel enterprises in 2023 fell 32.40%.

During the year, CITIC Pacific Special Steel faced increasingly challenging market conditions and responded by strengthening synergies and committing to a development strategy focused on variety, quality and profitability. Faced with changing market demand and landscape, the company quickly adjusted its approach to seize opportunities in sectors such as oil, natural gas, power, petrochemicals, wind power, solar energy, and new energy vehicles, to mitigate the impact of declining demand in mid- to high-end markets for bearing and automotive steels. Guided by the principles of excellence and distinction, CITIC Pacific Special Steel steadily increased its production and sales volume. Its stable and robust operation demonstrated the company’s resilience against the impact of market and industry volatility. In 2023, CITIC Pacific Special Steel’s operating revenue was RMB114.019 billion, a year-on-year increase of 15.94%, and profit attributable to ordinary shareholders was RMB5.721 billion, a year-on-year decrease of 19.48%.

In addition, CITIC Pacific Special Steel is making significant efforts to drive the deep integration of digital technology into the real economy. Through digital transformation, it has spearheaded comprehensive reforms, accelerated the development of data assets and harnessed the value of data. The company has achieved remarkable results in its digital transformation journey by actively working towards advancing intelligent operations and maintenance. As such, Xingcheng Special Steel was recognised as a Factory Lighthouse by the World Economic Forum, becoming the first-ever Lighthouse in the global special steel industry.

Sales and Products

In 2023, CITIC Pacific Special Steel maintained steady operations throughout economic fluctuations. In the face of challenging market conditions with a substantial decline in demand, the company quickly adapted and implemented a set of strategies to overcome the adverse effects of the market downturn and seize the opportunities presented by the government’s Dual Carbon policy. Capitalising on the emerging sectors of wind power and new energy vehicles, the company expanded its offering in energy and automotive steels to deliver 56% and 20% more sales respectively. During the reporting period, the company realised a record high total sales volume of 18.89 million tonnes, a year-on-year growth of 24.4%. Export sales reached 2.38 million tonnes, with a strong growth rate of 50.1%, which incurred a higher gross profit than domestic sales.