"The Pearl River Delta in South China is an important base for auto and home appliance manufacturing," said Yao Lin, Ansteel's vice-president. "Building a presence in Guangzhou allows us to bring our steel products to many of the country's most important buyers.
"As many domestic steel makers are seeking ways to expand their export channels under current weak global market demand, we need to focus more closely on market demand and localization strategies in China's manufacturing bases such as the Pearl River Delta and the Yangtze River Delta."
Yao said the company has continually invested in a program of training sales specialists at Anshan-based University of Science and Technology Liaoning for three years.
"China is a large exporter of steel and a big importer for special steel used in shipbuilding, weapons, auto and machinery manufacturing. However, the import prices of steel are three times as much as export prices on average," said Zhao Ying, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences in Beijing.
Sun Jin, director of communications at Wuhan Iron and Steel (Group) Co, one of China's biggest iron producers by capacity, said even though the company announced two months ago that it would cut up to 50,000 jobs, there have been no layoffs or pay cuts yet.
"The company just wants to optimize labor resources, reduce human resource costs and enhance labor productivity. We still give workers a basic salary and social security. They just work somewhere else," he said.
Rather than waiting for the market's hit to drive it out of business, the Wuhan-based steel maker has made its non-steel businesses, including new materials, energy resources, engineering and information technologies, logistics and modern services sectors, the main breadwinners.
In 2013, the operating revenue generated by these new activities accounted for about 30 percent of the group's total, but now they account for more than 50 percent.
"During the planned economy period, we used these businesses to save money. Now, we rely on them to make money. The supporting roles will play leading roles in the foreseeable future to win time for the restructuring of the steel industry," said Sun.
The government said 500,000 workers in the steel sector are expected to lose their jobs as part of the efforts to cut overcapacity. It will provide 100 billion yuan for retraining and to help them find new jobs.
According to the China Iron and Steel Industry Association, 77.8 million metric tons of crude steel capacity has been cut nationally since 2011, with more expected.
"The government this year will speed up efforts to help guide unprofitable mills out of the market," said Zhao Chenxin, spokesman for the National Development and Reform Commission, adding that efforts to cut overcapacity will be implemented as soon as local governments finalize and submit capacity reduction plans to the central government.
In addition, the winds of trade protectionism are still blowing strong from the United States, as the U.S. Commerce Department set final anti-dumping duties of 265.79 percent and anti-subsidy duties of 256.44 percent on imports of cold-rolled flat steel from China on May 17. China's Ministry of Commerce has taken action under the World Trade Organization dispute settlement framework to respond to the US move.
"The steel industry faces global challenges. Resorting to protectionism won't solve the problem," said Li Guanghui, vice-president of the Chinese Academy of International Trade and Economic Cooperation.
