Shandong Iron and Steel Co., Ltd.
Sustainability Report
Sustainability Report
Contents
About This Report?????? 1
Chairman's Message?????2
Party-building Leadership 12 Innovation-Driven Development 60
About Shandong Steel????4
Corporate Governance 14 Intelligent Manufacturing 66
ESG Governance 18 Supply Chain Security 68
Business Ethics 23 Product and Service Safety and Quality 70
Compliance and Risk Management 26 Data Security and Privacy Protection 76
Tax Management 30 Employees 78
Occupational Health and Safety 85
Social Welfare 92
Addressing Climate Change 34 ESG Key Data Table 94
Environmental Compliance Management 41 GRI Standards Index???????????100
Pollutant Emissions 41 Topic Disclosure Index ??????????107
Waste Management 47 Feedback Form??????????????108
Energy Utilization 49
Circular Economy 55
Ecosystem and Biodiversity Protection 56
About This Report
Shandong Steel Co., Ltd. Sustainability Report systematically discloses the Company's
philosophy, initiatives, practices, and performance in environmental, social, and governance
Data Sources
matters for 2025. All data contained in this Report originate from official documents and statistical reports of Shandong Iron and Steel Co., Ltd.
This report is published in both Chinese and English versions. In the event of any discrepancy, the Chinese version shall prevail.
Preparation Basis
◎ Global Sustainability Standards Board "GRI Standards for Sustainability Reporting" (GRI Standards)
Reporting Entity and Scope ◎ United Nations 2030 Sustainable Development Goals (SDGs)
This Report refers to Shandong Steel Co., Ltd., which includes its subsidiaries, branch companies, directly affiliated institutions, ◎ State-owned Assets Supervision and Administration Commission of the State Council "ESG Special ReportCompilation Study
and affiliated plants. On October 24, 2025, the Company's Eighth Board of Directors held its Seventeenth Meeting and approved ?? for State-owned Enterprise Controlled Listed Companies"
the resolution to acquire 100% equity stake in Laiwu Steel Group Yinshan Profile Steel Co., Ltd., with equity transfer completed
on November 1, 2025. 2025 data includes Laiwu Steel Group Yinshan Profile Steel Co., Ltd. For convenience of expression and ◎ Guidelines No. 4 of Shanghai Stock Exchange for Self-Discipline Supervision—Compilation of Sustainability Report
reading, "Shandong Steel Co., Ltd." is also referred to in this Report as "Shandong Steel," "the Company," or "we;" "Laiwu Steel
Group Yinshan Profile Steel Co., Ltd." is referred to as "Yinshan Profile Steel;" "Shandong Iron and Steel Group Co., Ltd." is ◎ Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)
referred to as "SD STEEL" or "the Group."
◎ Shanghai Stock Exchange "Sustainability Development Report Compilation Guide for Listed Companies"
◎ Shandong Province "ESG Indicator System Work Guide for State-owned Controlled Listed Companies" (LuGuozi Shouyi
Reporting Period ?? [2024] No. 3)
This Report covers the period from January 1, 2025 to December 31, 2025. To ensure data continuity and comparability of trends, ◎ "Chinese Enterprise Sustainable Development Report Guide (CASS-ESG 6.0)"
portions of the content extend beyond this timeframe.
◎ Guidelines for the Special Report on Environment, Society and Governance (ESG) for Iron and Steel Enterprises by the China
?? Iron and Steel Association
Publication Cycle
Report Availability
This Report is an annual report, generally released by April 30 of the following year. Since 2010, the Company has released annual
Social Responsibility Reports. In 2022, the Report was renamed to "Social Responsibility and ESG Report," and in 2024 it was
You can search for Shandong Steel (Stock Code: 600022) announcements on the Shanghai Stock Exchange website http://www.
further renamed to "Sustainability Report." The Company has continuously released Social Responsibility Reports / ESG Reports sse.com.cn, or query and download this Report on the "Listed Companies - Shandong Steel (600022.SH)" column at http://www.
/ Sustainability Reports for 16 consecutive years. shansteelgroup.com, the Shandong Iron and Steel Group Co., Ltd. website.
Chairman's Message
In 2025, faced with a complex and volatile market environment and multiple internal and external challenges, Shandong Steel adhered Technological innovation as a driving force. Guided by the development principles of "high-end, high-efficiency, intelligence, and
to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully, accurately and comprehensively green practices" and with value creation as the core objective, the Company built a technology innovation management system
implemented the new development philosophy, firmly seized the important opportunities of strong support from Shandong Iron and featuring clear accountability, collaborative sharing, efficient operations, and dynamic vitality. Intellectual property lifecycle
Steel Group for its core business and integrated collaborative support from Baoshan Iron & Steel Co., Ltd. The Company accelerated management was strengthened to continuously enhance the contribution of technological innovation to enterprise value. R&D efforts
reform to strive for survival, deepened benchmarking to identify gaps, strengthened team-based tackling of difficulties, and made focused on core process bottlenecks such as smooth on-site operations, cost improvement, and quality stability. By precisely aligning
targeted efforts along the five main lines of improving efficiency, reducing costs, expanding markets, adjusting structure and with the practical needs of "the shop floor and the marketplace," the Company concentrated superior resources on key markets,
strengthening coordination. Key reforms achieved remarkable results, operating performance improved significantly, and a steady and continuously refined product varieties, strengthened brand presence, and drove products toward premium positioning and deeper
positive development momentum was maintained. penetration of niche markets.
Strengthening governance to build a solid foundation. The Company upheld Party-building leadership in driving development, Building a nest to attract talent. Focused on enhancing the quality and effectiveness of talent management, the Company continued
steadily converting the political strengths of Party-building into governance effectiveness and development momentum. Anchored in to improve talent development mechanisms, driving continuous gains in human resource allocation efficiency and talent capital
our strategic positioning, we pursued scientific planning of management and operations, optimized the governance framework, and effectiveness. Emphasizing a "high-caliber, precision-focused, urgently needed" orientation, the Company prioritized the recruitment
standardized decision-making processes. We continued to advance the standardization and diversification of the Board of Directors, of critically needed talent in key fields, targeted national and provincial talent programs to broaden selection scope and horizons,
deepened ESG governance practices, and fully safeguarded the legitimate rights and interests of all stakeholders. By adhering to the and established an "industry-academia-research-application" collaborative training mechanism to deepen the development of
rule of law in corporate management and holding firm to the baseline of compliant operations, the modernization of our governance highly skilled talent. The "Health Protection, Union Companionship" employee wellness initiative was vigorously implemented, and
system and capabilities continued to improve. the "universal coverage plus targeted precision" care system became more refined, enriching employees' sense of belonging and
Deepening reform to unlock new capabilities. The "1+6+N" system transformation was further implemented, achieving breakthroughs fulfillment.
in key areas and continuously refining a modern organizational and institutional framework characterized by "centralized consistency, Joining hands to write a new chapter. We further advance the integration and restructuring of the steel sector to enhance asset value
streamlined structure, efficient processes, and clear responsibilities." New business models for value creation operated with high creation capabilities, vigorously advance intelligent manufacturing, empower industrial operations with artificial intelligence, fully
quality and efficiency, the R&D system reform accelerated, manufacturing processes were deeply optimized, and the specialized tap the profit potential of production lines and products,actively foster new quality productive force promote strategic cooperation in
integration of energy and utilities advanced steadily. The vitality of all employees in value creation was fully unleashed, overall all dimensions, and actively improve the industrial and ecological chains. We actively advance market value management to boost
operational quality and efficiency improved comprehensively, and core competitiveness continued to strengthen. both the quantity and quality of corporate value, and effectively safeguard the rights and interests of shareholders and stakeholders.
Dual breakthroughs in green and smart development. Upholding the philosophy of "Low-Carbon, Clean, Green Shandong Steel," With firm confidence,steadfast resolve, strengthened actions, and joint efforts, we will together write a new chapter of high-quality
the Company empowered its transformation and high-quality development through green, digital, and intelligent initiatives. A development for Shandong Steel.
routine management and control mechanism for ultra-low emissions was established, consolidating and enhancing the Grade-A 2026 marks the first year of the "15th Five-Year Plan" and also a critical year for the steel industry to undergo in-depth adjustment,
Environmental Performance rating across all operations. The pursuit of ultimate energy efficiency deepened, with self-generated optimization, and accelerated transformation and upgrading. Shandong Steel will continue to persist in the "Five Orientations"
electricity at Steel City Base rising steadily and Rizhao Base earning the national-level "Leader" title for energy efficiency in the steel (Differentiation, High-end development, Green development, Intelligent development, People-or iented development) development
industry.The carbon management system was strengthened to promote the application of proven carbon reduction technologies, and direction and (production based on orders, output with marginal contribution, profits supported by cash flow, revenue driven by profits)
AI-powered smart management was advanced to empower industrial operations, fully tapping the profit potential of production lines of operations, deepen transformation and survival, vigorously enhance manufacturing capacity, product operational capability, and
and products, and actively cultivating new quality productive forces, with 20 "AI + Steel" application projects deployed across both value creation ability, promote continuous improvement in operational performance, and achieve a good start for the "15th Five-Year
bases. Plan."
About Shandong Steel
About Shandong Steel
Shandong Steel carries forward its original intention and mission of "steel for national benefit and steel for national strength," transformation to smart manufacturing, and integrates information technologies such
rooted in Shandong province, serving the whole nation, with eyes on the world, standing at the forefront, turning challenges into as one-click steelmaking, remote operation and maintenance and industrial robots Product Application Areas
opportunities, advancing steadily amid stability, developing through reform, breaking through in adversity, and growing through with industrial development and corporate governance. Adhering to the concept of
innovation. The Company has explored a new development path characterized by green, intelligent, and low-carbon development, attaching equal importance to developing circular economy and advancing energy
conservation and emission reduction through science and technology, the Company
carving out a high-quality development route that adapts to the trends of the era, suits the Company's reality, and embodies innovative
further strengthens structural energy conservation, technological energy conservation
vitality.
and management energy conservation through technological innovation, deepens
the cascade utilization and circular utilization of resources, and achieves remarkable
Company Overview results in energy conservation, emission reduction and circular economy. The main
entities of the Company have successively received a number of honors including
Shandong Steel is headquartered in Gangcheng District, Jinan City, Shandong "National Environmentally Friendly Enterprise, ""National Model Unit for Afforestation,
Province, and is a state-owned controlled large-scale integrated steel enterprise. ""National Pilot Demonstration Enterprise for Integration of Informatization and
Has successively won In December 2011, SD STEEL implemented an integration of its two steel listed Industrialization to Promote Energy Conservation and Emission Reduction, ""Top Ten
the following honors National Enterprises for Comprehensive Utilization of Resources, ""Environmentally
subsidiaries—Jinan Iron and Steel Company Limited (Jigang) and Laiwu Steel
Company Limited (Laigang exchanged shares to merge into Jigang); in February Friendly Enterprise for Clean Production in China's Iron and Steel Industry "and
National Environmentally Friendly
Enterprise
March 2012, the stock symbol was changed to "Shandong Steel" (Stock Code: of national circular economy pilot enterprises, national water-saving benchmark
National Model Unit for Afforestation 600022). In December 2023, China Baowu strategically invested in SD STEEL enterprises, the first batch of "Dual-Carbon" Best Practice Energy Efficiency
(holding 49% stake), and Baosteel strategically invested in Shandong Iron & Steel Benchmark Demonstration Factory Cultivation Enterprises by China Iron and Steel
National Pilot Demonstration Enterprise Rizhao Co., Ltd. (holding 48.6139% stake), forming a "dual participation" operating Industry Association, and Shandong Province Grade-A Environmental Performance
for Integration of Informatization and model where China Baowu participated in SD STEEL and Baosteel participated in Enterprise (all regions), with its sustainable development capacity continuously
Industrialization to Promote Energy Rizhao operations. In November 2025, the Company completed the acquisition of improved.
Conservation and Emission Reduction 100% equity stake in Laiwu Steel Group Yinshan Profile Steel Co., Ltd.
Principal Business
Shandong Steel operates two major steel production bases—Steel City Base in
Top 10 Enterprises in National Jinan and Rizhao Coastal Base—forming five major product lines: plate, hot and
Resource Comprehensive cold rolled products, section steel, special steel, and construction steel. The
Utilization Company's products are applied in advanced equipment, marine engineering, Driven by scientific and technological innovation, Shandong Steel is committed to
rail transportation, home appliances, petrochemical equipment, engineering building efficient and comprehensive integrated solutions for steel materials. Focusing
Clean Production and machinery, automotive manufacturing, and other key sectors, and is a nationally on five core products, namely section steel, plate, hot and cold rolled products, special
Environmentally Friendly Enterprise recognized production base for medium-heavy plate materials, gear steel, and steel and construction steel, the Company continuously strengthens the upgrading
in China's Iron and Steel Industry H-beam steel. The Company possesses a complete integrated production process and innovation of steel materials. As an important steel production base in China,
covering raw materials, coking, sintering, pelletizing, ironmaking, steelmaking, the Company's products feature high standards, high technological content and
Green Factory and steel rolling. Overall equipment levels are comparatively advanced, including: environmental friendliness with outstanding comparative advantages, high market
hot rolling line, 1 x 2,030 mm cold rolling line, large and medium special steel of high-performance steel materials, and has successfully made technological
bar production lines, H-beam production lines, and other process equipment, all breakthroughs in key products such as hot-rolled coils of large-deformation-resistant
reaching nationally leading levels. pipeline steel and hot-rolled dual-phase steel for automobiles, filling industry gaps
The Company upholds advance planning, precise positioning and acting in and promoting products toward high-end development. The products are widely used
accordance with the trend, actively advances the development of informatization, in automobiles, petroleum, railways, highways, bridges, construction, electric power,
intelligentization and greening, empowers traditional industries with advanced machinery, shipbuilding, home appliances and other fields, and are exported to dozens
technologies including artificial intelligence, vigorously promotes the of countries and regions around the world.
About Shandong Steel
Historical Milestones Organizational Structure1
Meeting
November 2025: The acquisition
of 100% equity in Laiwu Steel Committee
Group Yinshan Profile Steel Co.,
December 2023: China Baowu
made a strategic investment in Board of Directors Board Secretary
SD STEEL, acquiring a 49% stake; Budget, Compensation and
Baosteel acquired a 48.6139% stake
in Shandong Iron & Steel Rizhao 09
Co., Ltd., inaugurating the "Double November 2021: The 32.26% equity
Participation" operating model. stake held by major shareholder Risk Management and Audit
Jigang Group was transferred Committee
The Rizhao High-End Steel Production
Base was fully put into operation,
and the Laiwu Branch launched the
systematic optimization, upgrading
Investment Management
Corporate Culture Department
Planning and Technology
Operations Improvement
Office (Board Office)
Operations and Finance
Risk and Compliance
Human Resources
and transformation for the transform-
(Union, Youth League, Armed
Department (AI Smart
ation of old and new growth drivers.
Department
Department
July 2017: All steel production
Department
Department
Department)
Department
lines at Jigang were permanently
Forces)
shut down.
March 2013: The National Deve-
lopment and Reform Commission
approved the Rizhao High-End Steel
Production Base project. 2012
February 27, 2012: The Company
was renamed "Shandong Iron
and Steel Co., Ltd." Major Controlling
Subsidiaries
December 30, 2011: The Company
completed the absorption and
merger of Laigang.
(Technology Center)
Shandong Steel Research Institute
Procurement Center
Marketing Corporation
Financial Services Center
Human Resources Reserve Center
Manufacturing Management Department
Equipment Management Department
Department (Carbon Management Office)
Energy and Environmental Management
Safety and Security Department
Logistics and Transportation Department
Ironmaking Plant
Steelmaking Plant
Special Steel Plant
Section Steel Plant
Bar and Rod Plant
Plate and Strip Plant
Shandong Iron and Steel Rizhao Co., Ltd.
Laiwu Steel Group Yinshan Profile Steel Co., Ltd.
Shanxin Software Co., Ltd.
Tianyuan Gas Company/Huanyou Chemicals/
Regional Sales Subsidiaries
April 24, 2006: The split share
structure reform was completed.
June 29, 2004: The Company
was listed on the Shanghai Stock
Exchange.
December 29, 2000: The Company
was incorporated and registered.
Organization structure as at 31 December 2025
About Shandong Steel
Corporate Culture Recognition and Honors
ESG Ratings
Vision Mission
Building the most Contributing new mom-
entum to the construction 2024-2025 China Iron and Steel Enterprise ESG Rating: AAA
competitive steel
of a steel ecosystem
enterprise in and providing strong
northern China support for high-quality 2025 China Iron and Steel Enterprise ESG Rating: AAA
development of the man-
ufacturing industry
Wind ESG Rating: AA
Sino-Securities Index ESG: AA
Business Shandong
Core Values Philosophy Steel Spirit
Co-creation, Co- Excellent Trust is constant
progress, Co-win products win as mountains, Awards and Honors
markets, integrity innovation
creates the future transcends limits
Won the "2025 Best Practice Case in Sustainable Development for Listed Companies" by China Listed Companies Association
Won the "2025 Best Practice in Board Office Construction for Listed Companies" by China Listed Companies Association
Development Strategy Won the "2025 A-Share Listed Companies ESG Excellence TOP 100" by Sino-Securities Index
Won the Shandong Province's "May lst Labor Award"
“Research and Application of Blast Furnace Stockline Charging Process Optimization Based on Discrete Element Method
?? "won the Second Prize of Shandong Intelligent Manufacturing Competition
Integrate into the steel Implement the transition
ecosystem and establish from old to new growth
Development
a new benchmark for drivers, optimizing energy, Rizhao Base was selected into the 2025 National Key Industry Energy Efficiency "Leader "List, recognized as an Excellent-
green and intelligent Strategy process, and technological
transformation in the structures ?? level Smart Factory, and included in the first batch of Environmental Facility Opening Units
steel industry
Develop China's premier Optimize inland product
coastal production base transformation and build
for high-quality sheet and China's section and special
coil products, leading in Coastal Inland steel base
scale and efficiency
Implement the new development concept, setting a model for green urban steel mill development
into its entire business process. With Party-building leadership as the core, and corporate governance,
Party-building Leadership
compliance and risk control, tax management as priorities, the Company improves its sound and steady
operation system by strengthening shareholder value management, perfecting stakeholder communication
Corporate Governance
mechanisms, and building a strong line of defense for business ethics, so as to support the high-quality
development of the Company.
ESG Governance
Business Ethics
Compliance and Risk Management
Tax Management
Party-Building Leadership Organizational Strengthening
The Company places high importance on strengthening primary-level Party organization development, with Party organizations'
political and organizational functions continuously enhanced. The Company continuously improves integrated top-down, tightly
Shandong Steel consistently upholds Party leadership as the "foundation" and "soul" of enterprise development. Guided by "Xi Jinping
organized, and forcefully implemented organizational systems, establishing regular guidance and inspection mechanisms for
Thought on Socialism with Chinese Characteristics for a New Era", the Company earnestly implements "the spirit of the 20th Party primary-level Party-building work and a monthly key work list advancement mechanism. Through deepening "Five-Heart Four-
National Congress and all subsequent plenums". Maintaining "two consistent principles" and achieving "two deep integrations," Party Modernization" Party-building brand development, the Company integrates Party-building work with production and operations,
committees fully exercise their role in setting direction, managing the overall situation, and ensuring implementation. The Company forming a "one Party committee, one characteristic, one branch, one brand" primary-level Party-building work pattern. The Company
leads high-quality development through high-quality Party-building. builds a "1+N+X" brand matrix, upgrading Party-building brands from "quantitative accumulation" to "quality enhancement" and from
"scale clusters" to "premium clusters." By the end of the reporting period, the Company has cultivated 103 excellent Party-building
Political Leadership work brands, with the proportion of four-star and above Party branches reaching 82.1%.
The Company always prioritizes political development, firmly establishing the political identity that "state-owned enterprises serve The Company widely carries out Party character practice activities such as employee Party responsibility areas, model posts, task
the Party." The Company strictly implements the "first agenda" system, aligning political direction and enhancing political capability forces, project assignments, and technical problem-solving teams. The Company advances "Party-building+" projects and strategically
through studying the Party's innovative theories, firmly upholding "two establishments," and resolutely achieving "two safeguards." develops the "Strive for Excellence and Innovation as Pioneers; Achieve Profitability and Build New Achievements" thematic practice
activity, promoting effective coordination and unified effort between Party-building and central work. The Company fully leverages
The Company conducts high-standard study and education on implementing "the spirit of the Central Committee's eight-point
the battle-fortress role of primary Party organizations and the pioneering role of Party members. By the end of the reporting period,
decision", The Company decisively implements superior decision-making and deployment, innovatively building a "1+4+N" three-
the Company has implemented 392 "Party-building+" projects; established 496 Party member model posts, 525 Party member
dimensional supervision model and establishing a "one-matter-one-document, time-limited feedback, dynamic tracking" work
responsibility areas, 248 Party member task forces, and 386 responsibility area problem-solving projects. Party members undertook
mechanism. The Company bridges the "last mile" in implementation and ensures that superior decisions are faithfully executed 4,878 assigned performance projects, solving 4,054 production and technical challenges. The Company organized 249 Party member
without deviation or distortion. volunteer services with 2,081 Party member volunteer service participants.
Ideological Excellence
Party organizations at all levels of the Company make full use of the theoretical study group sessions and the "First Agenda" study The proportion of Party branches rated four-star and above reached 82.1%.
to conduct comprehensive, systematic, timely, in-depth and practice-oriented learning, and consciously arm the mind and guide
practice with the Party’s innovative theories. Taking the education on implementing the spirit of the Eight-Point Decision of the Excellent Party-building work brands: 103??? Party member model posts: 496
Party member responsibility areas: 525????"Party-building +" projects: 392
Central Committee as an important starting point to deepen the Party’s work style and promote comprehensive and strict Party
governance, the Company insists on leading bodies taking the lead in learning, carries out thematic study seminars and warning
Performance indicators undertaken by Party members: 4,878
education, and advances learning, inspection and rectification in an integrated way to ensure quality learning, rigorous inspection and
effective rectification. Party members and cadres have firmer ideals and beliefs, stronger awareness of discipline and more steadfast
work style. Technical problems solved in production and operation: 4,054
Institutional Consolidation Research projects in responsibility areas: 386?? Party member volunteer services: 249
Party member volunteer participants: 2,081 person-times
The Company continuously improves its Party-building system, clearly defining the scope of matters subject to the Three Importance
and One Majority decision-making system implementing pre-discussion by Party committees on major issues and checklist-based
management of important matters, and strictly enforcing the system for reporting major issues. The Company has comprehensively
implemented "Party-building inclusion in the Articles of Incorporation" across the Company and its subsidiaries, clarifying Party
organizations' duties, authority, institutional structure, operating mechanisms, and fundamental safeguards. This has further Work Style Refinement
solidified the legal position of Party organizations in the Company's governance structure.
The Company's Party Committee attaches high importance to conduct development, deeply implementing the "Refining Steel
Industry Conduct and Implementing New Development Strategy" Education and Practice Activity Plan. The Company communicates
and implements the "high standards, strictness, meticulousness, solidity, and speed" conduct requirements to every employee,
continuously advances "four rectifications and four enhancements" activities, actively advocates "breaking ten and establishing ten,"
and earnestly refines steel industry conduct. This provides powerful momentum and solid guarantee for enterprise high-quality
development. The Company deepens specialized rectification of formalism and bureaucratism, addresses development bottlenecks
and employee concerns, and promotes problem self-inspection and rectification sign-off. The Company precisely implements "three
distinctions," appropriately exempting or not holding accountable certain issues identified in specialized supervision in accordance
with regulations. The Company conducts substantial follow-up education to demonstrate organizational care and inspire intrinsic
motivation for enterprise development.
Party Governance and Discipline
We have always maintained a strict tone and made unremitting efforts, formulated responsibility lists at all levels, continuously
improved the responsibility implementation system featuring "coordination of four responsibilities" and sound operation, kept
tightening the responsibility for Party governance over the Party, and further promoted comprehensive and strict Party governance.
We adhere to a problem-oriented approach, conduct in-depth investigation and rectification, carry out thorough warning education, set
up rectification ledgers and implement "item-based cancellation management". We have continuously strengthened the development
of the major supervision system, issued the "Notice on Deepening the Major Supervision System and Strengthening Administrative
Supervision," clarified the boundaries of duties, pooled supervision synergy, and taken integrity risk prevention and control as the
starting point to build a supervision system that combines daily supervision and special supervision.
Corporate Governance
● The Shareholders' General Meeting serves as the Company's authority body and exercises all statutory
Shandong Steel adheres to principles of compliance first, proactive engagement, and honesty and integrity to earnestly protect powers. The Company treats all shareholders equally and fully protects shareholder legitimate rights.
shareholder rights and continuously advance company value creation. The Company strictly complies with the "Company Law of the In 2025, the Company convened five General Meetings of Shareholders and deliberated 17 proposals.
People's Republic of China", the "Securities Law of the People's Republic of China", the "Code of Governance for Listed Companies", All General Meetings were strictly conducted in accordance with Listed Company Shareholder Meeting
Shareholders'
"Shanghai Stock Exchange Listing Rules", "Shanghai Stock Exchange Self-Regulatory Management Guidelines for Listed Companies General Rules and the Company's Articles of Association, combining in-person and online voting, actively inviting
No. 1 – Normative Operation", and other applicable laws, regulations, regulatory rules, and the Company's Articles of Association. Meeting minority shareholders to participate. Proposals affecting minority shareholder interests had voting results
The Company has established an effective checks-and-balance governance structure and a standard-compliant internal control separately recorded.
system, fully protecting the legitimate rights and interests of the Company and all stakeholders while promoting healthy, stable, and
sustainable company development. ● T he Board of Directors is the business decision-making body of the Company, which formulates
strategies, makes decisions and manages risks. It exercises the decision-making power on material
issues of the Company in accordance with legal procedures and the Articles of Association of the
Governance Strategy Company, and strengthens the management and supervision over the management. The Board of
Directors has established the Strategic Planning and ESG Committee, Nomination Committee, Risk
Management and Audit Committee, as well as Budget, Compensation and Appraisal Committee. Except
The Company's governance strategy is grounded in protecting the legitimate rights of shareholders and all stakeholders, centered on
for the Strategic Planning and ESG Committee, the other three committees are chaired by independent
enhancing governance effectiveness and decision-making science, and maintains risk prevention and mitigation as its baseline. The
Board of directors, with independent directors accounting for the majority of their members. All members of
strategy ultimately aims to achieve the company's goals of long-term company value growth and sustainable development. Directors
the Budget, Compensation and Appraisal Committee are independent directors. In 2025, the Company
The Company adheres to the "two consistent principles" and continuously improves modern corporate governance with Chinese convened 13 meetings of the Board of Directors, deliberating 88 proposals. The attendance rate of Board
characteristics. The Company establishes systematic, comprehensive, scientifically regulated, and efficiently operated governance members was 100%, and the performance of all special committees was strengthened. Among others, the
systems. The Shareholders' General Meeting, Board of Directors, and Executive Management strictly adhere to principles of legally- Strategic Planning and ESG Committee held 1 meeting, the Nomination Committee held 6 meetings, the
defined authority and responsibility, transparent authority and responsibility, coordinated operation, and effective checks and Risk Management and Audit Committee held 6 meetings, and the Budget, Compensation and Appraisal
balances, ensuring compliant and efficient operations. Committee held 1 meeting.
● E xecutive Management is the Company's execution body responsible for business planning,
implementation, and management. It reports to and is supervised by the Board of Directors. Executive
Strategic Planning and
Management is responsible for company daily operations and management, providing clear task
ESG Committee assignments, responsibility clarification, and detailed measures for Board decisions with focus on
Shareholders' General
Meeting Executive implementation. The Company implements closed-loop management, strengthens tracking of proposal
Management execution, and ensures effective implementation of all Board resolutions. In 2025, the Company revised
the Working System for the General Manager to Report to the Board, improved the reporting mechanism,
Nomination Committee
held 28 general manager office meetings and deliberated 236 proposals, with all Board resolutions fully
implemented with high quality.
Board of Directors
Budget, Compensation and
Appraisal Committee
Board diversity
Executive Management The Company actively promoted Board diversity, taking a multidimensional approach that considers gender, age, educational
Risk Management and
background, work experience, professional expertise, and skills and knowledge in composing the Board, aligned with its development
Audit Committee
model and business needs, to ensure the diversity, independence, and compliance of Board membership. By the end of the reporting
Corporate Governance Structure
period, the Board comprised nine directors, including one female director, one employee director, five non-independent directors
covering the fields of steel metallurgy, business administration, economic management, and finance, and four independent directors
who are experts in steel metallurgy, automation, accounting, and applied economics.
Including,
List of Directors as at 31 December 2025
measures. It organized directors, supervisors, senior executives and key personnel of relevant departments to participate in training
Strategic Risk Budget, on market value management, fostered awareness of market value management and thinking on capital operation, and improved
Professional Planning Nomination Management Compensation professional competence. The Company continuously advanced share repurchase, strove for the controlling shareholder to increase
Position Name Gender Board
Background and ESG Committee and Audit and Appraisal
Committee Committee Committee its shareholding, and strengthened investor relations management. It efficiently pressed ahead with asset restructuring and
completed the acquisition of 100% equity of Yinshan Steel Section, which thoroughly resolved the issue of horizontal competition,
Chairman Mao Zhanhong Male Steel Metallurgy Chairman significantly reduced related party transactions, further optimized the product mix, and improved management efficiency and core
competitiveness.
Wang
Director Male Steel Metallurgy Director
Xiangdong Legally Compliant Information Disclosure
Independent Independent
Wang Jinkuan Male Automation
Director Director The Company strictly complies with all laws, regulations, and regulatory requirements for listed companies and continuously
improves information disclosure systems. In 2025, coordinating with "Company Articles of Association revisions," the Company
Independent Independent
Wang Aiguo Male Accounting
Director Director timely revised and improved related systems including the "Management System for Information Disclosure Affairs," "Management
System for Reporting Significant Information," and "Working Rules of the Board Secretary," establishing a sound, effective, scientific,
Independent Independent
Xu Ke Male Steel Metallurgy
Director Director and standard information disclosure system. The Company issued 104 standardized announcements throughout the year covering
Board and General Meeting resolutions, earnings guidance, and other materials. All information disclosures were truthful, accurate,
Independent Meng Independent
Male Applied Economics
Director Qingchun Director complete, timely, and fair.
Director Li Hongjian Male Steel Metallurgy Director
Advancing Share Repurchase and Increase
Engineering and
Director Qiao Lihai Male Director
Finance
The Company completed share repurchase as scheduled, and controlling shareholder SD STEEL completed share increases on
Business Employee schedule.
Employee Director Gao Fengjuan Female
Management Director
Reform of the Board of Supervisors
Share Repurchase
Share Increase
In 2025, in accordance with the arrangements for the reform of the board of supervisors made by the China Securities Regulatory I n 2 0 2 5 , t h e C o m p a n y re p u rc h a s e d In 2025, SD STEEL increased its
Commission and the State-owned Assets Supervision and Administration Commission of Shandong Province, and in light of the 57,338,400 shares, representing 0.5359% s h a re h o l d i n g b y 1 0 , 7 2 1 , 7 0 0 s h a re s ,
Company’s actual conditions, the Company completed the revision of the Articles of Association of the Company, abolished the board of total shares outstanding, for RMB representing 0.1002% of total shares
of supervisors and did not appoint supervisors. The Risk Management and Audit Committee of the Board of Directors exercises the 79,987,423 (excluding stamp duty, trading outstanding, for RMB 14,098,220 (excluding
functions and powers of the board of supervisors as stipulated in the Company Law of the People's Republic of China and regulatory commissions, and other transaction fees). stamp duty, trading commissions, and
provisions. Meanwhile, the Working Rules of the Risk Management and Audit Committee of the Board of Directors was revised From February 5, 2024 to February 4, 2025, other transaction fees). From June 13, 2024
simultaneously. The reform of the board of supervisors and the revision of articles of association for all its affiliated companies were the Company cumulatively repurchased to June 12, 2025, SD STEEL cumulatively
completed, further consolidating the foundation for the standardized governance of subsidiaries. 153,508,852 shares, representing 1.4348% increased its shareholding by 400,349,301
of total shares outstanding, for a cumulative shares, representing 3.74% of total shares
amount of RMB 200,372,658.92 (excluding outstanding, for a cumulative amount of
Institutional Framework Improvement stamp duty, trading commissions, and other RMB 500,076,010.98 (excluding stamp duty,
transaction fees). trading commissions, and other fees).
The Company continuously tracked the latest regulatory rules and promptly
undertook the development and revision of policies to ensure the legality,
Strengthen Investor Relations Management
compliance, scientific rigor, and effectiveness of its corporate governance
framework. In 2025, the Company formulated two new management policies —
The Company continuously enhances communication and exchanges with investors, focuses on improving the effectiveness of value
the "Information Disclosure Postponement and Exemption Management Policy"
communication, and boosts market recognition. Directors, senior executives of the Company actively engage with investors and
and the "Director and Senior Management Departure Management Policy" — and
other stakeholders, earnestly listen to opinions and suggestions, and respond to demands in a timely manner. Meanwhile, it expands
revised 15 management policies including the "Board Authorization Management The Company won the 2025 Best Practice of
the breadth and depth of communication with stakeholders through various channels, including shareholders' general meetings,
Measures" and the Board Deliberation Agenda, consolidating the institutional Board Office of Listed Companies by China
performance briefings, investor exchanges, visitor receptions, hotlines, SSE E-Interaction, WeChat Official Accounts, and news media.
foundation for the Company's standardized and efficient operations. Listed Companies Association.
In 2025, the Company held 19 performance briefings or investor exchanges through a combination of online and offline approaches,
attracting over 100 institutions to participate; it responded to 66 investor questions via SSE E-Interaction and answered 155 investor
Governance Strategy calls, conducting thorough communication on key concerned issues such as operating performance, equity acquisition of Yinshan
Section Steel, informatization and intelligent construction, technological innovation, and capital expenditure.
Systematic Promotion of Market Value Management Going forward, Shandong Steel will continue to strengthen internal information communication, ensure normalized and efficient
operation of Shareholders' General Meeting, Board of Directors, and Executive Management, continuously improve decision-making
The Company has always taken improving operation quality as the core focus, centered on value creation, systematically planned
compliance and information disclosure quality, strengthen research and application of shareholder value management policies
and further advanced market value management, thoroughly studied and flexibly applied value management tools, enhanced the
and value tools, and deepen shareholder value management through active dividend distribution, standardized governance, capital
effectiveness of value communication, and elevated the professional level of market value management. In 2025, the Company
operations advancement, optimized information disclosure, and continuous improvement of investor communication mechanisms,
deliberated and approved the 2025 Valuation Improvement Plan and Action Plan for Quality Improvement, Efficiency Enhancement and
enhancing market recognition of company value.
Return Focus, clarified the path for valuation improvement, dynamically tracked work progress and optimized promotion
ESG Governance The Company has established and improved its ESG management system, formulating policies including the "Working Rules of
the Strategic Planning and ESG Committee of the Board of Directors" and "ESG Work Management System." These define ESG
management philosophy, responsibility boundaries, and work principles while optimizing internal management mechanisms.
To strengthen the ESG responsibility awareness of senior management, the Company closely links executive compensation with
Shandong Steel, adhering to sustainable development principles, integrates ESG management into the entire process of enterprise ESG factors such as safety, technological innovation, and risk management, establishing an incentive-constraint mechanism of
operation and development. With normative governance as foundation, stakeholder cooperation as linkage, and material issue "responsibility binding and performance linkage."
management as leverage, the Company systematically builds its ESG management system, continuously improves governance
architecture, deepens practice implementation, and enhances disclosure quality. The Company earnestly fulfills environmental,
social, and governance responsibilities while contributing to the Company's high-quality development and industry-wide sustainable
Define ESG Define Optimize internal Strengthen ESG Responsibility
development.
management responsibility management responsibility binding and
ESG Governance Framework philosophy boundaries and mechanisms awareness performance
work principles linkage
Shandong Steel deeply integrates ESG principles into its corporate governance system, establishing a three-tier ESG governance The Company deepens the research on cutting-edge ESG theories and practical exploration through diversified means such as
structure: the Board of Directors, the Strategic Planning and ESG Committee, and ESG Promotion Organizations. By refining ESG top- organizing and participating in special ESG trainings and conducting ESG exchanges with peer enterprises, continuously enhances
level design, the Company ensures environmental, social, and governance-related topics are fully integrated into corporate strategic the ESG management awareness and professional competence of all employees, and improves the effectiveness of ESG governance.
planning and all major decision-making processes, enabling strategic coordination and efficient implementation of ESG topics. In 2025, based on regulatory requirements, advanced industrial practices and mainstream rating standards, the Company formulated
Specifically: the Board of Directors is the highest responsible body for ESG management operations and information disclosure; the and issued an ESG improvement plan and management manual, which substantially enhanced the management level of sustainable
Strategic Planning and ESG Committee serves as the research and guidance body for ESG work; the ESG Implementation Leading development and ESG work. With solid practices and outstanding achievements in the ESG field, the Company has won a number of
Group oversees daily ESG operations; the ESG Coordination and Implementation Office organizes and implements daily ESG work; honors and achieved a significant improvement in ESG ratings.
and all functional departments and business units serve as ESG execution bodies. For detailed responsibilities, please refer to the
Company's "Announcement on the Proposal of ESG Governance Structure Construction" (Announcement No.2022-047).
Decision-
Making
Level
Board of Directors
Sino-Securities "2025 A-Share Listed China Listed Companies Association "2025 Sino-Securities "2025 A-Share Listed
Company Raw Materials Industry ESG Listed Company Sustainable Development Company ESG Excellence" TOP100
Management
Performance" TOP20 Excellent Practice Case Award"
Level
Strategic Planning and ESG Committee
ESG Implementation Leading Group
Enterprise ESG Rating Enterprise ESG Rating ESG Rating
Execution Level
AAA AAA AA AA
ESG
ESG Coordination and Implementation Office Implementation
Organization
Functional Departments and Business Units
Stakeholder Engagement
The Company views communication with stakeholders as a critical component of ESG management. Adhering to principles of
integrity, interaction, equality, and transparency, the Company continuously improves stakeholder engagement mechanisms and
ESG Governance Framework
communication channels, establishing diversified communication platforms combining regular and ad hoc engagement. The
Company comprehensively collects stakeholder concerns and suggestions, actively responds to and implements recommendations,
and earnestly creates continuous value for all stakeholders.
Stakeholder Key Concerns Communication and Response Dual Materiality Assessment
? ● Shareholders' general meeting?
? ● Corporate governance?? The Company follows the "dual materiality" assessment principle, simultaneously considering both impact materiality and financial
? ● Information disclosure
● ESG governance
? ● Investor communication meetings materiality of ESG topics. The Company conducts annual material issue assessments and provides focused disclosure of dual
? ● Stakeholder communication?
● Earnings briefings materiality topics in reports to meet stakeholder expectations.
Shareholders and ? ● Economic performance and financial results
Investors ? ● On-site visits
? ● Anti-commercial bribery and anti-corruption
? ● Other investor communication channels
? ● Meetings and training?
? ●
? ● Compensation and benefits system optimization ● T he Company comprehensively considers sustainable development disclosure standards and
Compensation and benefits
? ● Promotion mechanism improvement
? ● Democratic management guidelines, capital market rating requirements, peer ESG disclosure practices and industrial
? ● Unions and workers' representative congresses
? ● Employee care and assistance? sustainable development trends. Combined with the actual operation of the Company, it optimizes
? ● Employee assistance?
● Career development and training
Employees ?
? ● Diverse cultural and recreational activities
the original topics on the basis of the topics identified in 2024, and finally completes the identification,
? ● Occupational health and safety
● Intelligent manufacturing
? ● Company intranet, bulletin boards, Wechat official screening and definition of 28 ESG topics highly relevant to the Company’s development.
?? account and other platforms Topic Screening
? ● Public reporting channels
? ● Product and service safety and quality
? ● Customer responsibility ? ● Quality management ● The Company conducts communication and dialogue with stakeholders including shareholders and
? ● Innovation-driven development ? ● Communications and visits investors, employees, customers, suppliers, government agencies and regulators, communities and
● Intelligent manufacturing ● Official media platforms
the public, and news media. The Company systematically collects important issues and concerns of
? ● ESG governance ? ● Customer satisfaction surveys and improvement initiatives
each party.
? ● Climate change response ? ● "Three-one" New service model
Customers ? ● Environmental compliance management ? ● QCDVS customized service
? ● Occupational health and safety ? ● Co-building technology innovation collaboration centers Stakeholder
? ● Anti-commercial bribery and anti-corruption ? ● Customer complaint channels Engagement
? ● Data security and customer privacy protection
? ● Supply chain security ? ● Supplier audits/assessments ● Leveraging stakeholder engagement, the Company assesses the likelihood, scale, and scope of topic
? ● ESG governance ? ● Supplier management
? ● Equal treatment of SMEs ? ● Communications and visits
impacts. The Company organizes business experts, financial experts, and external sustainability experts
Suppliers ? ● Anti-commercial bribery and anti-corruption ? ● Supplier training to conduct financial materiality assessments across two dimensions: continuity of resource use and
relationship dependency. Based on quantitative analysis of impact materiality and financial materiality
assessment results, the Company presents overall topic materiality priorities in matrix form.
? ● Occupational health and safety Dual Materiality
? ● Climate change response Evaluation
? ● Environmental compliance management ? ● Compliance with laws and policies
? ● Pollutant emissions ? ● Major projects, policy and recommendation participation
? ● Waste management ? ● Participation in government and regulatory meetings
Government ? ● Energy utilization ? ● Information disclosure
● Circular economy ? ● On-site inspections/visits/reception
Agencies and ?
● Anti-commercial bribery and anti-corruption ? ● Energy conservation, emission reduction and pollution
Regulators
● Based on assessment results, the Company, through internal review, identifies topics requiring focused
? ● Anti-monopoly and fair competition ??control
? ● Compliance and risk management
disclosure with high materiality, ensuring material topics are comprehensively presented in this report.
? ● Economic performance and financial results The Company also applies assessment results to its ESG management work, implementing targeted
closed-loop management to continuously improve performance.
? ● Social welfare Verification and
? ● Public welfare and volunteer activities
? ● Climate change response Disclosure
? ● Community engagement
? ● Environmental compliance management
? ● Interactions via official media and WeChat
? ● Pollutant emissions
? ● Disclosure of energy conservation, emission reduction
Communities and ? ● Waste management
Public ? and pollution control initiatives
? ● Water resource utilization
? ● Information disclosure
? ● Stakeholder communication
? ● Stakeholder communication ? ● Press conferences
? ● Climate change response
? ● Information disclosure
? ● Pollutant emissions
? ● Official media platforms, Wechat official account and
? ● Social welfare
Media ? ● Economic performance and financial results
??other channels
? ● Anti-commercial bribery and anti-corruption
Business Ethics
Based on the 2025 dual materiality assessment, the Company identified six topics with both financial materiality and impact
materiality: addressing climate change, pollutant emissions, energy utilization, innovation-driven development, employees, and
occupational health and safety. For these topics, the Company will disclose information in four dimensions — governance, strategy,
impact, risk and opportunity management, and metrics and targets — in accordance with the Guidelines No.14 of Shanghai Stock
Shandong Steel maintains professionalism, honesty and integrity in commercial activities, conducts business in accordance with laws
Exchange for Self-Regulation of Listed Companies — Sustainability Report (Trial), to fully demonstrate the management effectiveness
and highest ethical standards, creates a fair, transparent and honest environment, cultivates a clean culture, and firmly opposes and
and advancement pathways for these topics.
severely cracks down on commercial bribery, corruption, unfair competition and other acts that damage reputation, consolidating the
foundation of sustainable development.
Anti-Bribery and Anti-Corruption
High
Addressing Climate Change
Integrity Risk Management
Innovation-Driven Development
The Company strictly complies with the Criminal Law of the People's Republic of China, the Anti-Money Laundering Law of the
People's Republic of China, Provisional Provisions on Prohibiting Commercial Bribery, and other applicable laws and regulations. The
Compensation and Benefits Company formulates and implements systems including the "Integrity Risk Prevention and Control Work Implementation Measures
Energy Utilization (Trial)," "Guidelines for Special Prevention and Control of Commercial Bribery Risk," and "Sunshine Procurement Management
Measures," continuously improving its integrity management system. These provide solid institutional foundation for comprehensive
Environmental Compliance Career Development and Training anti-commercial bribery and anti-corruption work. The Company firmly maintains fair, free market competition, opposes any form
Impact Materiality on Economy, Society, and Environment
Management of commercial bribery, extortion, fraud, money laundering, monopolistic, or other unfair competition practices, and maintains zero
Occupational Health and Safety tolerance for all conduct violating business ethics.
Water Resource Utilization The Company systematically advances anti-commercial bribery, anti-corruption, and integrity risk prevention system development,
Product and Service Safety and Quality continuously strengthening institutional constraints, digital enablement, cultural immersion, and supervision closed loops. The
Pollutant Emissions
Company solidly establishes integrity foundations for enterprise high-quality development. Integrity risk prevention is incorporated
Supply Chain Security into enterprise compliance and comprehensive risk management systems. The Company formulates and implements the "Integrity
Smart Manufacturing Anti-Monopoly and Risk Prevention and Control Work Implementation Measures (Trial)," establishing and continuously improving prevention networks
Fair Competition
Emission Reduction
covering key areas, core processes, critical links, and all positions. The Company establishes sound daily integrity risk investigation,
Customer Responsibility
Management identification, early warning, and disposal mechanisms.
The Company has formulated tiered and categorized prevention and control measures to realize systematic identification and precise
management and control of integrity risks. Meanwhile, prevention and control measures are embedded into the entire process of
Data Security and Customer Waste Management operation and management, and synchronized management and control is realized through information-based approaches. In 2025,
Privacy Protection the Company did not incur any fines or settlements arising from unfair competition, conflicts of interest, money laundering or insider
Anti-Bribery and Anti-Corruption
Corporate Governance trading.
Circular Economy Care and Assistance The Company continuously strengthens integrity compliance management for key position personnel. The Company formulated
Democratic Management the "Regulations for Clean Interaction between Key Position Personnel and Stakeholders," establishing eight "negative lists" for
Fair Treatment of SMEs
Compliance and Risk Management respectful yet clear interaction. These comprehensively standardize interaction between key position personnel and stakeholders,
Social Welfare
establishing clean business relationships. The Company actively leverages information systems to enhance governance effectiveness,
ESG Governance
achieving effective monitoring of critical positions and sensitive areas, continuously eliminating or reducing integrity risks.
Stakeholder Engagement
Integrity Culture Development
Ecosystem and Biodiversity Conservation
The Company has actively advanced the development of the "Clean Shandong Steel" brand, and earnestly implemented the Three-Year
Low Plan for Integrity Culture (2024–2026) and other relevant documents. We have continuously consolidated the "1+4" integrity education
Low High matrix, which focuses on political education and Party spirit education, and consists of four major components: "embedded"
Financial Materiality to the Company discipline education, "stratified" warning education, "interactive" family style education, and "ladder-based" venue education. Integrity
education has been integrated into daily business procedures, further enhancing the awareness of integrity in practice among all
●Environmental Topics ●Social Topics ●Environmental Topics
Party members, cadres and employees. In 2025, various entities at all levels of the Company carried out diverse forms of integrity
education activities, and business ethics training was provided to all employees.
Shandong Steel 2025 Dual Materiality Topic Matrix
Going forward, Shandong Steel will fully leverage this report's role in promoting management improvements, continue implementing
sustainable governance initiatives, address ESG management gaps, overcome weak areas, actively respond to stakeholder concerns,
continuously enhance ESG management level, and truly strengthen the Company's "non-financial reporting" brand.
"1+4" Integrity Education Matrix Building a Clean Ecosystem
● Discipline education is made a mandatory course for cadres and staff. Through multi-layered The Company views building a respectful-yet-clear, mutually beneficial commercial ecosystem as a key dimension of sustainable
"Embedded" Discipline and categorized methods including discipline and law classes, thematic lectures, exchange development strategy. The Company is committed to permeating fair, transparent, and trustworthy compliance concepts through
Education discussions, integrity conversations, and knowledge tests, the Company educates and guides
key business areas such as procurement and marketing. Through systematized institutional constraints, digitalized process control,
Party members, cadres, and staff to deeply understand the essence of discipline and law
provisions, strictly practice specific requirements, and internalize compliance and discipline as normalized bidirectional supervision, and deepened partner coordination, the Company continuously strengthens integrity safeguards
unconscious daily conduct standards. and cultivates a healthy and stable market environment.
● The Company strengthens warning education for "key minority personnel" including Party Actively promote the co-construction of a clean ecosystem upstream and downstream. On the procurement
"Stratified" Warning members, cadres, and key position personnel. Through one-on-one and face-to-face discussions, side, dynamically carry out integrity education, case warning education and holiday reminders through
Education and exchanges viewing warning education films by individuals and family members, circulating platforms such as the "Lianxinqiao" WeChat Official Account and the "Integrity & Upright" education
repentance records and typical case notices, visiting integrity education bases, and inviting experts
column, formulate and issue the Negative List for Interactions with Suppliers, and continuously strengthen
for specialized lectures, the Company strengthens warning deterrence and promotes learning
from cases and sustained vigilance. the compliance awareness of all employees
● The Company continued to deepen the unique role of families in integrity culture building,
Actively expand two-way communication, take the initiative to listen to opinions through forms such as
flexibly organizing family-assisted integrity seminars, signing of the Integrity Commitment Letter
and Family-Assisted Integrity Initiative Letter, composing integrity-themed family letters and visits and research and co-construction activities, promote business through integrity, and strengthen
"Interactive" Family Style messages, family visits and immersive experiences, themed interactive activities, integrity-themed cooperation through synergy, so as to effectively create a supply chain integrity ecosystem that is open,
Education calligraphy and painting solicitations, and the recognition of exemplary role models, among other transparent, compliant and win-win.
activities. These efforts continuously enhanced the appeal, engagement, and reach of family-
assisted integrity initiatives, building a solid foundation of upright corporate culture through
thousands of clean and honest households. In 2025, the Company adopted the "dual-course Strengthen source governance, revise the Integrity and Honesty Agreement, and include violations such as
integration, two-way co-construction, dual-assessment activities" model to carry out family- commercial bribery, fraudulent acts, contract breaches, and unfair competition into the breach clauses.
assisted integrity activities, sustaining a positive atmosphere of family-enterprise collaboration.
Establish a working mechanism of "Interview & Consultation + Supervision & Recovery", strictly recover
● The Company builds the "Steel Integrity Culture Garden"2 at the Rizhao Base, integrity culture funds from defaulting suppliers, force suppliers to operate in good faith, and create a sound political
creation demonstration sites and education venues, and integrity culture corridors, providing ecosystem and a sunny and efficient operation ecosystem.
"Ladder-based" Venue
excellent venue and environmental resources for integrity education. In 2025, the Company
Education
organized 49 Party branches to participate in integrity culture demonstration point creation, fully
activating "integrity" momentum, consolidating and strengthening integrity highlands.
Reporting and Investigation Mechanism
The Company establishes and improves a multi-dimensional reporting acceptance and investigation mechanism covering
letters, visits, internet, telephone and QR code channels. It encourages all stakeholders to report any acts violating
business ethics either by real-name or anonymously, and regularly inspects and evaluates the effectiveness of reporting
channels to ensure that any suspected violations of business ethics can be reported conveniently and securely.
The reporting matters involving violations of discipline and laws by Party members shall be accepted by the discipline
inspection department in accordance with regulations, while other matters shall be transferred to the corresponding
functional departments for investigation based on professional fields, so as to ensure timely response and standardized
procedures. Strict confidentiality measures shall be implemented for reported matters through special personnel
acceptance and special archiving. Proper rewards shall be given to real-name reporters whose reports are verified to
be true in accordance with relevant provisions. In 2025, the timely disposal rate of reported matters of Shandong Steel
reached 100%.
"May 20 — I Love Integrity" Family-Assisted Integrity Awareness Campaign
Reporting Hotline: 0531-76821163，77920968????
Online Reporting Mailbox: gf77920968@shan-steel.com
No. 99 Fucheng Street, Gangcheng District, Jinan City, Shandong Province, Postal Code: 271104
Anti-Unfair Competition
The Company strictly abides by the Anti-Unfair Competition Law of the People’s Republic of China and other laws and regulations,
upholds the principles of voluntariness, equality, fairness and good faith, observes business ethics and eliminates unfair competition
acts. It focuses on preventing typical unfair competition acts such as commercial bribery, strengthens the internal compliance
"Clean Breeze Nurtures Young Hearts; Integrity Guides Growth"
system, clarifies employee code of conduct, and enhances supervision and restraint through the reporting mechanism. Meanwhile,
Integrity-Themed Cultural Works Exhibition and Employee Family Fun Sports Day
the Company accelerates the formulation of the Compliance Guidelines on Anti-Unfair Competition, and deepens compliance training
Recognized as China Baowu Warning Education Base and SD STEEL "Integrity Education Base".
Compliance and Risk Management Integrating ESG Risk
The Company integrates ESG risks including those related to environmental protection, employee health and safety, information
system security, supply chain security, and intellectual property into existing risk management processes for unified identification,
The Company aims to achieve sustainable and high-quality development. It deeply integrates risk management, compliant operation assessment, and monitoring, ensuring effective management of ESG-related challenges and opportunities. The Board Strategic
and independent audit into the entire process of corporate governance and operation, and establishes a solid and effective supervision Planning and ESG Committee is responsible for identifying and monitoring ESG-related risks and opportunities significantly impacting
and control system to ensure the steady and long-term development of the Company. company business and guiding management in taking appropriate response measures.
Risk Management
Based on the COSO-ERM framework and ISO 31000 standard, and combined with its strategic planning and actual production and Environmental Occupational Information
Supply Chain Intellectual
operation, the Company has established a new "1+N" risk management system featuring innovation, integration, coordination Protection Health and System
Security Property
and continuous improvement, so as to ensure the Company’s law-based, compliant and steady operation and achieve high-quality Safety Security
sustainable development. Guided by risk management, based on internal control, bottom-lined by compliance management and
guaranteed by the rule of law, the system ultimately serves the creation and maintenance of the Company’s value.
COSO-ERM framework,
Foundation System
"1+N" new-model risk Risk Management and Control Process
ISO 31000 standards management system
Through routine risk screening, specialized assessments, project-based management, and dynamic early-warning mechanisms, the
Company achieved full-lifecycle risk management encompassing pre-event prevention, in-process control, and post-event resolution,
ensuring that risks are identified, flagged, and mitigated at the earliest stage. The Risk and Compliance Department was deeply
involved in pre-review of major decisions and business activities, proactively providing risk management recommendations in areas
Risk Management System
such as bidding and procurement, investment, and asset disposal throughout the year, effectively fulfilling its pre-event prevention
The Company established a risk management organizational system with clear authority and responsibilities and a "three lines of function. In 2025, all major risks of the Company remained under control.
defense" operating mechanism, building a comprehensive risk management institutional framework that is "scientifically designed,
clearly structured, process-standardized, comprehensively covered, responsibility-defined, mutually supportive, and operable."
Leveraging a standardized corporate governance structure, the Company defined risk management responsibilities at all levels
and built a top-down integrated risk management organizational system comprising the Party Committee, Board of Directors,
Risk Management and Audit Committee, General Manager / Senior Management, Risk and Compliance Department, and all risk Risk Management and Control Process
management business units, achieving clarity of responsibilities, standardized processes, tiered management, and coordinated
collaboration. In 2025, seven core management policies including the "Comprehensive Risk Management Measures" and the "Internal
Control Management Policy" were systematically revised, standardizing the procedures for identifying, assessing, and reporting major
risks, and strengthening the management, information communication, and supervision of major risks.
Conduct regular risk identification, forming risk lists
Risk
Identification
Organize risk assessment work, assess risk probability and impact magnitude, determine annual major
risk list
Risk
First Line of Defense Second Line of Defense Third Line of Defense Assessment
Business departments Internal Audit and the Risk Management
Risk and Compliance Department ● Based on risk assessment results, analyze risk causes;
and Audit Committee
● Develop risk response plans including risk mitigation, avoidance, sharing/transfer, and acceptance;
Business departments conduct Risk and Compliance Department Internal audit and the Risk Management Risk
Response ● Develop risk management improvement plans and complete improvements within timeframes
comprehensive risk management guides and supervises all business and Audit Committee reviews risk
per management responsibilities. departments in implementing risk control effectiveness and audits risk
They are responsible for risk management requirements, timely management during operations.
identification, response plan identifies risk management gaps, Risk
d eve lo p m e n t a n d d y n a m i c develops risk response measures, Monitoring Monitor and report on specialized risk management work and daily risk management progress
and Reporting
monitoring, integrating risk control and monitors improvement
throughout daily operations. implementation.
Three Lines of Defense in Risk Management
Compliance Management Culture Cultivation
The Company innovates an integrated compliance operation and management mode, advancing deep integration of compliance
The Company actively fosters a risk and compliance culture, and creates a strong
management with production and operations to achieve full-coverage, normalized compliance management. The Company
atmosphere where all employees study and practice risk and compliance culture and
strengthens compliance review of major and important business decisions, enhances compliance management and internal
take the initiative to integrate it into the whole process of business operations, so that In 2025，
control, continuously monitors updates to laws and regulations in business jurisdictions, timely develops compliance
risk prevention and compliance awareness are internalized in mind and externalized
management system revision work, and strengthens compliance culture development to ensure company operations are legally
in conduct. Through regular internal training, lectures by external experts, case
compliant.
studies and experience exchanges on risk control, irregular compliance knowledge a total of 7 training sessions
competitions, benchmarking learning and other means, the Company ensures that on compliance management
employees fully understand compliance requirements and corporate policies, and and risk prevention were held
The Company implements a chief legal counsel-led responsibility system, building a coordinated top- improves their awareness and capability of risk prevention and compliance. Through
down compliance management organizational system centered on Party Committee, Board of Directors, publicity channels such as WeChat Official Accounts and working groups, the Company
Management
Structure Executive Management, compliance management functional departments, business departments, and timely releases information on risk and compliance activities and typical cases to covering more than 800
management units, with business, function, and audit serving as three lines of defense. Additionally, strengthen the publicity and implementation of risk control and compliance concepts. people
each subsidiary selects business personnel as compliance managers responsible for unit compliance The Company takes compliance management as a compulsory course for the training of
risk identification, assessment, and response, ensuring position compliance performance, and managers, key position employees and new recruits.
promoting deep integration of compliance management with business work.
Case ?????? Business-Focused Compliance Capability Building
In June 2025, Shandong Steel invited senior legal experts to
The Company continuously strengthens compliance system development, formulates "Measures conduct specialized contract management training. Over 70
for Compliance Management," develops specialized compliance guidelines for key areas such as business managers, contract managers, and key employees
Management
System investment and contract management, and includes compliance performance in performance from various units attended in person. The training
evaluation systems. focused on "eight-step contract review methodology" and
"commercial contract investigation guidelines," combining
typical steel industry contract cases to provide in-depth
instruction on full-cycle contract risk prevention and control.
The training significantly enhanced business personnel's
The Company establishes a professional compliance risk assessment team, conducts regular compliance risk assessments with
practical contract compliance management and risk
professional compliance risk evaluation teams, and systematically analyzes compliance risk probability, impact magnitude, and
prevention capabilities, establishing strong legal compliance
potential consequences. The Company provides timely warnings for typical, widespread, or potentially severe risks and develops
safeguards for company stable operations.
contingency plans. The Company timely alerts subsidiaries to emerging, trending, or high-compliance-risk issues, ensuring timely
and effective remediation.
Audit Management
Going forward, Shandong Steel will continuously strengthen synergistic effectiveness of risk, compliance, and audit management.
The Company strictly complies with the Audit Law of the People's Republic of China, Audit Law Implementation Rules, Audit The Company will strengthen major risk dynamic assessment and monitoring, specialized risk assessment of major issues, achieve
Commission Provisions on Internal Audit Work, and other applicable laws, formulating "Internal Audit Management Provisions" to normalized comprehensive risk management coverage, and strictly prevent major risk occurrence. The Company will establish and
fully leverage internal audit functions and continuously improve governance systems. improve compliance management systems and compliance risk control mechanisms ensuring all business activities operate legally
and compliantly. The Company will strengthen audit supervision and service to enhance governance effectiveness. The Company will
The Company has established a comprehensive audit work organizational system. The Board of Directors is the leading body for the
continuously strengthen risk and compliance culture cultivation and development, enhance employee compliance awareness, and
Company's audit work; the Risk Management and Audit Committee of the Board is responsible for guiding and supervising internal
establish long-term risk management improvement mechanisms.
audit work; the Risk and Compliance Department is the Company's internal audit management body, under the guidance and
supervision of the Risk Management and Audit Committee.
In 2025, the Company conducted 5 internal audits centered on high-risk management areas and critical links including economic
responsibility and procurement management, received 3 audits from the parent company, and played important roles in closing
gaps, preventing risks, improving performance, and standardizing governance. The Company highly values problem remediation,
implements monthly scheduling advancement mechanisms, organizes responsible units to deeply analyze problem roots, develops
concrete and feasible remediation measures, and ensures thorough problem resolution. The Company improves "registered
remediation, signed-off management" audit problem remediation records and monthly oversight advancement of remediation
implementation.
Tax Management Tax Risk Management
The Company continuously strengthens the regular management of tax compliance risk, and establishes a whole-process, full-
link tax risk prevention mechanism and control process. The Company formulates "Tax Risk Management Measures" and "Tax Risk
Shandong Steel consistently treats tax management as an important component of company management. The Company strictly Management Standards," establishing a full-cycle tax risk control system featuring "pre-event warning, in-process control, post-event
implements national tax laws and regulations, fulfills tax obligations legally, ensures all taxes and fees are paid timely and in full, assessment." The Company comprehensively monitors tax risks from prevention, avoidance, control, and response dimensions.
and strengthens internal management and standardized accounting processes to safeguard the authenticity and accuracy of tax data.
In international tax business, the Company complies with international tax laws and regulations and follows principles including
tax jurisdiction, double taxation avoidance, tax information exchange, international tax adjustment, anti-tax evasion and anti-escape
measures, single taxation principles, benefit principles, and international tax neutrality to ensure all operations are conducted in Related Tax Response Risk Control
Tax Data Potential
accordance with laws and regulations. Regulation Tax Risk Strategy and
Analysis
The Company legally completes tax reporting and payment, actively cooperates with local tax authority supervision and guidance, and Research Identification Development Implementation
has maintained Level-A tax credit rating for consecutive years.
Tax Risk Management Process
Our Commitments
The Company adheres to risk control at the source and integrates tax administration into the front end of business processes. For
procurement, sales, maintenance, engineering, finance and other businesses, the entire chain from contract signing, invoice issuance
to accounting and fund transactions is incorporated into the scope of tax risk control. It strengthens tax-related risk assessment for
major items and tax-related control over details of business processes, and establishes an early warning mechanism for prone tax
risk points. Meanwhile, it dynamically updates the information base of tax laws, regulations and preferential policies, conducts regular
internal audits and tax-related self-inspections, and promptly identifies and eliminates potential tax risks.
The Company's operations The Company avoids tax The Company discloses its The Company complies The Company determines
comply withtax and legal structures lacking commercial tax policies transparently. with tax law and fulfills tax transfer pricing based The Company emphasizes enhancing tax management team professional competency and risk awareness through multiple channels
regulations of countries/ substance, proactively aligns Financial statements and reporting responsibilities on fair dealing principles, of tax information exchange and learning. The Company actively organizes personnel to participate in tax business training and major
regions where it operates, with tax policy guidance, audit reports detail deferred while maintaining transparent does not exploit tax law enterprise tax risk specialized training conducted by tax authorities and professional training institutions. The Company periodically
engaging only intransactions focuses on developing income tax assets and relationships with government differences, international tax invites tax authority experts and professional training institution instructors to conduct specialized training. The Company maintains
basedon genuine commercial business areas advocated by liabilities and applicable authorities. system gaps, or tax havens normalized communication with external professional institutions such as tax service firms, timely discussing and researching tax
activities. the state, and fully utilizes company tax items and for tax evasion, and does not regulations, policies, and company tax matters, ensuring tax treatment throughout all processes is legally compliant.
available tax incentives. rates. shift created value to lower- During the reporting period, the Company had no major tax violations.
tax jurisdictions.
Our Initiatives
Tax Management System
Systematically identify and assess tax risks and develop targeted risk prevention measures;
The Company continuously advances tax management innovation, building modern, systematic, and standardized tax management
systems, promoting deep integration of business, finance, and tax operations, and achieving transparent, standardized, fair, and
Continuously monitor tax risk dynamics, establish rapid response mechanisms, and timely report and address
just tax treatment. The Company implements a headquarters-centralized control model with tax management tailored to different
potential risks;
business types and regional characteristics of management units. Headquarters and all management units' finance departments
establish dedicated tax management divisions or positions with overall responsibility for tax risk prevention, fiscal-tax policy
implementation, and tax business handling. Implement full-process audit of all tax-related business to ensure compliance;
To ensure the standardized and professional operation of tax administration, the Company has formulated administrative measures
including the Administrative Measures for Enterprise Income Tax and the Administrative Measures for Taxation of Overseas Non-trade Conduct normalized tax risk training to enhance enterprise-wide tax risk awareness.
Businesses, as well as administrative standards including the Tax Administration Standard, Tax Declaration Administration Standard,
Enterprise Income Tax Administration Standard and Property and Behavior Tax Calculation and Administration Standard, further
refining the specific operational procedures and requirements for tax administration to achieve the standardization and normalization
of tax administration. In 2025, the Stamp Duty Administration Standard and Value-Added Tax Calculation and Administration Standard
were newly formulated, forming a complete framework of 12 management documents covering tax declaration, tax category
calculation, risk control and other aspects. The tax standardization system has been continuously improved.
Shandong Steel, anchored in the steel industry's commitment to green, low-carbon, high-quality
development, thoroughly advances the development requirements of green productivity, and pursues
green development, circular development, and low-carbon development as core pathways. The Company
integrates ecological and environmental protection concepts deeply into its entire production and operation
processes, achieving breakthroughs across climate governance, environmental compliance, solid waste
utilization, energy efficiency, and ecosystem protection. The Company is committed to realizing a win-win
Addressing Climate Change relationship between ecological and environmental protection and high-quality enterprise development,
and continuing to serve as a benchmark for green transformation in the steel industry.
Environmental Compliance Management
Pollutant Emissions
Waste Management
Energy Utilization
Circular Economy
Ecosystem and Biodiversity Protection
Addressing Climate Change Short-term Strategy: Carbon Reductionin Production Processes + Energy-conservation Carbon Reduction
The Company continuously optimizes blast furnace charge structure,
reduces iron-to-steel ratio, and increases scrap ratio, implementing a series
Rizhao Base maintained converter
of process-based carbon reduction projects including thick-bed sintering,
Governance sintering flue gas hot air ignition, hot air sintering, and pellet waste heat
recovery utilization, continuously reducing CO2 emissions. In 2025, Rizhao Base
scrap ratio above 23%
Climate governance is a critical global issue. Shandong Steel continuously advances climate governance work. The Executive maintained converter scrap ratio above 23%, while Steel City Base increased Steel City Base increased the con-
Management serves as the decision-making level for climate governance, responsible for reviewing the Company's carbon peaking
converter scrap ratio from 14% in 2024 to 16.5%.
verter scrap ratio to 16.5%
and carbon neutrality targets and development plans, studying and deciding on major matters in the carbon peaking and carbon Rizhao Base
neutrality process, and establishing carbon management systems based on relevant national policy documents.
Rizhao Base developed sintering hot air ignition energy-conservation technology in the sintering process, reducing sintering
The Energy and Environmental Management Department serves as the management/supervisory level for climate governance,
coke oven gas consumption while improving sinter quality. In the blast furnace process, the Company implemented an
with dedicated low-carbon positions. It is responsible for coordinating low-carbon policy research, green low-carbon technology intelligent combustion project for blast furnace hot blast stoves, utilizing big data for automatic optimization to construct
research and development and application; promoting carbon emission reduction, carbon asset management, and external exchange optimal combustion curves, achieving online autonomous intelligent control with blast furnace gas consumption reduced
and cooperation; and organizing supervision and assessment of the implementation of climate governance measures at the by over 3%. In the converter process, the Company upgraded steel ladle bakers to intelligent systems, achieving automatic
implementation level. baking curve adjustment and intelligent air-fuel ratio control, reducing converter gas consumption by 0.007 GJ/t. In the
rolling process, the Company conducted online repair of heating furnace refractory materials, reducing furnace heat loss
Each relevant department and subsidiary of the Company constitutes the implementation level for climate governance, responsible and lowering gas consumption. Cumulatively, CO2 emissions were reduced by 89,900 tonnes.
for implementing specific energy conservation and carbon emission reduction measures and accepting supervision and assessment
Steel City Base
by the Energy and Environmental Management Department.
Steel City Base advanced the application of mature carbon reduction technologies, with key carbon reduction projects such
Strategy as the 3,800 m? blast furnace hot blast stove co-firing with coke oven gas successfully commissioned, expected to reduce
iron-making process carbon emission intensity by 8%. The Company implemented three projects: increased utilization
of reclaimed municipal water, compressed air system renovation, and medium-scale steam recovery from profile steel
Shandong Steel actively responds to the national "Dual-Carbon (carbon peaking and carbon neutrality) development strategy", follows production. In 2025, energy conservation and carbon reduction projects cumulatively saved 41,000 tonnes of standard
SD STEEL's Carbon Peaking Work Plan, and has established strategic targets for carbon peaking and carbon neutrality aligned with coal equivalent and reduced CO2 emissions by 127,000 tonnes. The Company is currently advancing five projects including
the Company's circumstances. oxygen-enriched combustion modification for thick plate lines and waste heat recovery utilization for 1.2 million tonnes
pelletizing production line.
Medium- and Long-term Strategy: Technology Innovation-driven Carbon Reduction + Green
? Development-driven Carbon Reduction
Short-term
Target The target of reducing carbon emission intensity by 5% in 2025 compared with 2020 has been
Deepening Technology-based Carbon Reduction
achieved.
The Company actively applies low-carbon and carbon-reduction technologies such as top-bottom combined blowing of CO2
in converters and blast furnace injection of coke oven gas. Building on the successful implementation of CO2 top-bottom
combined blowing resourceful utilization projects in Converters 1 and 2 at Rizhao Base, in 2025 the Company promoted CO2
Medium-term resourceful utilization projects on Converters 3 and 4. By the end of the reporting period, all four converters have achieved
Ensure carbon peaking before 2030. By 2030, the Company will have resource conditions and
the application of top-bottom combined blowing of CO2, enabling the Company to realize resourceful utilization of 15,000
Target technical capacity to reduce carbon emission intensity by 30% compared to 2020, and will tonnes of CO2 annually.
reduce carbon emission intensity by 20% compared to 2020.
Management-based Carbon Reduction
The Company actively participates in the national carbon market, enhancing carbon management capability through
building a carbon management platform and establishing a carbon management system. Steel City Base established a
Long-term
carbon management system infrastructure platform (carbon accounting and analysis) and carbon asset management
Target Strive to achieve carbon neutrality by 2050. platform, and has completed 2024 greenhouse gas emission reporting and verification, 2025 monthly data archiving, and
clarified responsibility lists, closed-loop processes, and precise connections," coordinated carbon data and carbon asset
management, benchmarking advanced enterprises, and established a Carbon Neutrality Promotion Committee. The Base
clarified low-carbon management organizational structure, departmental responsibilities, and business processes. A
unified "production data-carbon emission data" platform was built, with data quality control schemes as the framework
and monthly digitalized archiving integrated throughout the year's carbon reduction work. The Company completed
Extreme energy the steel industry's first on-site verification after inclusion in the carbon emissions trading market, 2025 monthly data
Scientific efficiency Process Technology Green archiving, and the first carbon compliance fulfillment.
planning improvement innovation innovation development
Synergistic Carbon Reduction
Carbon Reduction Pathway Rizhao Base's integrated smart energy project combining waste heat utilization for residents' daily needs with fishery
applications operates through 12 waste heat resource stations, 1 primary station, and 38 kilometers of heating pipeline
During the reporting period, the Company implemented process-based carbon reduction projects, actively researched and applied networks. The project converts industrial waste heat from slag-flushing circulating water and flue gas generated in steel
carbon reduction technologies, and enhanced enterprise-wide energy conservation and low-carbon awareness, continuing to explore production into "green thermal energy" benefiting residents' daily life, saving 85,800 tonnes of standard coal equivalent
long-term, deep carbon reduction pathways for green sustainable development. annually and reducing CO2 emissions by 230,000 tonnes, equivalent to cultivating an "offshore green forest" spanning
approximately 2,000 acres, and achieving a win-win of environmental and social benefits.
Impact, Risk and Opportunity Identification Green Product R&D
Shandong Steel continuously researches green low-carbon steel materials with high strength, high toughness, high corrosion
Climate change risks have direct or indirect impacts on corporate operations and finances. Shandong Steel, in alignment with its
resistance, and high energy efficiency, coordinating with downstream steel-using enterprises in the industrial chain to implement
actual circumstances, assesses climate-related risks and opportunities across policy, regulatory, and market dimensions, identifying
carbon reduction practices. Rizhao Base established a "Green Low-Carbon Product Development and Certification Task Force,"
climate-related risks that may have material economic or strategic impacts on the Company's business.
comprehensively advancing "green steel" research and development, production, certification, and market application. The Base has
established the task force's organizational structure and a 2026 work advancement plan.
Risk Type Risk Category Potential Impacts
Offshore Engineering and Pressure Vessel Steel Plates
Rizhao Base is located on the shores of the Yellow Sea and is vulnerable to typhoon Serial development of offshore engineering steel grades has been
Physical
Typhoons strikes. In recent years, frequent extreme weather events globally may result in realized. The R&D and application of LRAH89 offshore engineering steel
Risks
impairment or loss of physical assets and other potential economic losses. marks the first application of the highest-grade steel grade in China’s
shipbuilding and offshore engineering sector. High-grade nuclear power
As the steel industry is included in the national carbon market and the Carbon Border steel SA738Gr.B has been successfully developed, and a breakthrough
Adjustment Mechanism (CBAM) enters its formal implementation phase, the Company has been made in the R&D of 420DR steel plates for mobile pressure
Policy and Legal will face rising carbon prices, increased carbon compliance costs, energy transition vessels.
Framework policy constraints, and green trade barriers such as foreign carbon tariffs, which
may suppress exports and increase investment, operational, and export costs while
reducing returns.
High-Strength, High-Toughness Wind Power Steel Plate
In the low-carbon transition process, the Company needs to increase investment Achieved full coverage of 355–500 MPa strength grades with innovative
Technology and in energy-saving environmental protection technology application and low-carbon applications in multiple landmark projects. The 420 MPa-grade wind
Cost steelmaking technology research and development, which will result in rising R&D power steel plate was successfully applied to distributed wind power
Transition
costs and potential fixed asset value loss risks. projects, completing the first domestic full-tower design, manufacturing
Risks
and demonstration application. While improving tower load-bearing
Domestic steel demand has entered a plateau phase. Driven by the green low-carbon capacity and safety performance, steel consumption was reduced by
development trend across the entire industrial chain, market demand for green, low- 10% to 15%, advancing the low-carbon development of the wind power
Market carbon emission steel products will gradually increase, and competition among steel industry.
enterprises will intensify. If the greening process lags, the Company may lose market
share.
High-Strength, High-Toughness Pipeline Steel Hot-Rolled Coil
Stakeholders' and the public's concerns about the Company's climate action initiatives
Reputation
may pose reputational risks to company operations.
Large-diameter, long-distance oil and gas transmission high-strength,
high-toughness pipeline steel hot-rolled coil achieves scientific
Climate change promotes and reshapes socioeconomic development patterns, offering opportunities for enterprise sustainable balance between high strength and high toughness through innovative
development. Through analyzing industry and market conditions, combined with the Company's circumstances and strategic processes. With excellent performance characteristics and broad mature
positioning, the Company has identified the following opportunities: applications, it has become the ideal selection for large-diameter, long-
distance oil and gas transmission pipeline projects.
Products and Services Energy Efficiency Energy Sources
Capitalize on the increasing demand for Through optimizing production processes,
Substitute clean energy for traditional
steel in new energy sectors by vigorously extreme energy utilization, and resource
high-carbon energy, gradually increase
developing steel for wind power, marine recycling, improve energy efficiency, Characterized by excellent strength and toughness, erosion resistance,
the proportion of green electricity from
equipment steel, and others. Through advance energy conservation and emission and fatigue resistance, it is a key component for the traveling
reduction, and reduce operational costs. photovoltaic, wind, and hydroelectric
researching and developing ultra-high yield
sources, establish a green circular mechanisms of large engineering machinery such as excavators,
strength steel plates, pipeline steel, and bulldozers, and crawler cranes. It is one of the most challenging track
economy system, continuously reduce
other low-carbon green products, meet plate steel varieties in the hot rolling process. The Company has mass
c o m p a n y e n e rg y ex p e n d i t u re a n d
market and customer demand for low-
compliance costs, and support low- production capacity for track plate steel products across ten major series
carbon products and services.
carbon development. and more than 40 specifications.
Plates for Oil Storage Tank Low-Carbon Capability Building
Q490RW (Q490RW-SR) is a high-strength steel plate primarily used for
manufacturing petroleum storage tanks and other equipment. It meets Green Design
stringent performance requirements, including a low yield-to-tensile ratio
( ≤ 0.91), high strength (610~730 MPa), and excellent low-temperature
impact toughness. In extreme regions such as deep seas and polar areas, The Company adheres to the concept of Life Cycle Assessment (LCA) and green design, and actively promotes the green design
it safeguards energy security. and green product certification of steel products. During the reporting period, the Steel City Base carried out life cycle assessment
on three special steel products of the special steel small bar, new medium bar and large bar production lines, completed LCA
reports, and issued Environmental Product Declarations (EPD) for round steel (large bar) and round steel (medium and small bars).
High-Strength Structural Steel The Rizhao Base issued EPD reports for heavy steel plates (3500mm rolling mill) and heavy steel plates (4300mm rolling mill),
and promoted the carbon footprint accounting of steel for shipbuilding and marine engineering, supporting the development of
Product development has been achieved for products with specifications
greenshipping through low-carbon production.
ranging from 6 to 100 mm and yield strength grades from 460 to 690 MPa.
These products have passed second-party certifications by a number of
well-known enterprises, enabling large-volume supply to key customers.
Product supply standards cover European standards, American standards,
Chinese national standards and Japanese standards. Q960E, the highest-
strength medium and heavy plate product developed within Shandong
Province, has been certified and put into mass production, representing a
landmark breakthrough in medium and heavy plate products.
Premium Fingerprint-Resistant Galvanized Products
Our products have successfully entered the high-end home appliance
market, with over 80% supply share for television back panels of a
leading appliance enterprise, and the Company has become the highest-
rated material supplier in its supply chain. Stable supply of this product
has effectively enhanced the Company's competitiveness in premium
appliance steel products.
Participating in Green Low-Carbon Standard-Setting
Nickel-Based Steel Products
The Company actively participates in low-carbon standard-setting to advance industry green low-carbon development. During the
Ultra-thin nickel-based steel products with thicknesses of 5mm to 8mm reporting period, the Company participated in formulating 1 national standard, 1 industry standard, 2 group standards, and 2 local
achieve international advanced level in plate flatness control and realize standards: "Structural Steel Plate for Wind Power Towers" (GB/T 28410-2025), "General Requirements for Electric Arc Furnace Short-
the optimal matching of composition, rolling and heat treatment. The
Route Steelmaking Production" (YB/T 6339-2025), "Hot-Rolled H-Beam Steel for Photovoltaic Support Structures" (T/SDSAS 005-
Company is the first in China to pass the crack arrest test for nickel-
based steel with specifications of 10mm to 35.2mm at -165℃. Nickel- 2025), "Technical Specification for Selection of Steel Materials in Wind Turbine Tower Design" (T/CRES 0035-2025), "Safety Technical
based steel products have been successfully applied in the 270,000 m3 Requirements for Converter Gas Dry Electrostatic Dust Collection Systems" (DB37/T 2119-2025), and "Safety Technical Requirements
LNG storage tank project of Phase II of CNOOC Jinwan “Green Energy for Converter Waste Heat Steam Recovery and Utilization" (DB37/T 2120-2025).
Port," the world’s largest single LNG storage tank by capacity. The
Company has become one of the very few enterprises globally capable of
mass-producing ultra-thin nickel-based steel plates as thin as 5mm.
Energy Conservation and Carbon Reduction Training
High-Strength Seismic Rebar Products
The Company actively conducts energy conservation publicity campaigns, promoting resource conservation and environmental
protection as a fundamental national policy through environmental advocacy, knowledge lectures, and participation in training.
We have achieved the full-series development of 400–635 MPa high-
The Company enhances green environmental and energy conservation awareness while advancing green low-carbon production
strength seismic rebar, applied in multiple landmark projects across
and lifestyle practices. During the reporting period, Rizhao Base organized training on "National Carbon Market Platform Testing
nuclear power, airports, tunnels, rail transit, and civil air defense
underground engineering. The 600–635 MPa hot-rolled seismic rebar is Precautions, Platform Functions, and Operational Highlights" and a specialist training on "LCA and Carbon Footprint Methodology
the Shandong province's first product offering, featuring high strength (Rel and CBAM Overview and Declaration", and also organized participation in the training class on Climate Change Response and Green
≥ 600 MPa), high plasticity, and excellent seismic performance (yield-to- Low-Carbon Transition Capacity Enhancement.
tensile ratio ≥ 1.25). While reducing processing and labor costs, it saves
over 15% in steel consumption, achieving significant cost reduction in
engineering applications.
Case ? ? Rizhao Base Conducts Greenhouse Gas Accounting Training
Environmental Compliance Management
In March 2025, Rizhao Base invited experts to conduct training on the interpretation of Greenhouse Gas Emission
Shandong Steel continuously optimizes its environmental management Decision-Making Level
Accounting and Reporting Guidelines—Steel Industry and monthly data archiving requirements. Personnel from the
framework, establishing a three-tiered environmental protection
Manufacturing Management Department, Equipment Department, Finance Department, and energy management staff Company Executive
management system. The Company's Executive Management serves as Management
from each production facility participated.
the decision-making level for environmental management, responsible for
major environmental decisions. The Energy and Environmental Management
Department serves as the management/supervisory level, responsible for Supervisory/Management Level
enterprise-wide environmental management including establishing and Energy and Environmental
Management Department
Metrics and Targets implementing environmental policy, and organizing the organizational
structure, planning activities, responsibilities, practices, procedures,
Shandong Iron and Steel conducts regular monitoring and management of direct and indirect greenhouse gas emissions, and has processes, and resources necessary to establish, implement, achieve, Implementation Level
formulated short-term, medium-term and long-term goals as well as phased and quantifiable implementation plans. In 2025, the review, and maintain the environmental policy. Other functional departments All Functional Departments and
carbon emission intensity per tonne of steel was lower than 1.76 tCO2 per tonne of crude steel, representing a decrease of more than and production facilities serve as the implementation level, establishing Production Facilities (with integrated
environmental protection management
relevant national requirements and standards. The total greenhouse gas emissions (Scope 1 + Scope 2) were 32.1474 million tonnes for implementing and executing the Company's environmental protection
Environmental Compliance Management Structure
of carbon dioxide equivalent. work.
The Company, in accordance with ISO 14001 environmental management
system and the "Environmental Management System—Requirements
Indicator Unit 2023 2024 2025 and Guidelines for Use" (GB/T 24001-2016), conducts routine annual
environmental management system supervision audits, achieving 100%
coverage of environmental management system certification.
Greenhouse Gas Emissions
tCO2e 24,512,877 24,821,339 29,932,954 During the reporting period, Steel City Base focused on 5 key areas including
(Scope 1)
post-permit environmental management and dust control, cumulatively
organizing 306 environmental supervision inspections, precisely identifying
Greenhouse Gas Emissions
tCO2e 2,670,937 2,331,860 2,214,487 and eliminating environmental hazards, conducting closed-loop remediation
(Scope 2)
of identified issues, and continuously improving environmental compliance
management levels.
Greenhouse Gas Emissions
tCO2e 27,183,814 27,153,199 32,147,441
(Scope 1 and Scope 2)
Environmental Management
System Certification
Note: 2025 carbon emissions are preliminary accounting data.
Pollutant Emissions
Governance
Shandong Steel strictly complies with environmental laws and regulations including the "Environmental Protection Law of
the People's Republic of China," "Law of the People's Republic of China on Prevention and Control of Air Pollution," "Law of
the People's Republic of China on Prevention and Control of Water Pollution," and "Law of the People's Republic of China on
Prevention and Control of Noise Pollution," and continuously improves pollution control systems. During the reporting period, the
Company revised 9 regulations including "Exhaust Emission Control Management Regulations," "Wastewater Discharge Control
Management Regulations," "Noise Pollution Control Management Regulations," "Radiation Environment Management Regulations,"
"Environmental Monitoring Management Regulations," "Environmental Protection Supervision Management Regulations,"
"Environmental Factor Identification and Evaluation Management Regulations," "Environmental Protection Responsibility System and
Accountability Management Regulations," and "Construction Project Environmental Protection Management Measures," ensuring
standardized environmental management operations.
The Company attaches great importance to pollution control and invested a special fund of 1.15 billion yuan in environmental
treatment projects in 2025. Through source emission reduction, process control and end-of-pipe treatment, the Company has
carried out in-depth environmental governance covering the whole process, all areas and all dimensions, consolidated and improved
the Grade A environmental performance across the board, and continuously enhanced its environmental treatment capacity and
management level. During the reporting period, the Company had no environmental pollution incidents. The compliance rate of
atmospheric pollutant emissions stood at 100%, the implementation rate of environmental protection “three simultaneous" was
Strategy wastewater discharge, "and promotes the utilization of urban reclaimed water in a
timely manner in line with the requirements of local governments. Through source
Air Pollutant Emissions
reduction, process control, cascade utilization of wastewater and other measures,
the Company has improved the reuse rate of water resources and reduced the
Wastewater discharge decreased by 19%.
volume of wastewater discharged. In 2025, the Company’s wastewater discharge
Shandong Iron and Steel has continuously deepened the governance of air pollutant emissions. The Rizhao Base took the lead was 5.4626 million tonnes, down 19% year-on-year; the chemical oxygen demand COD (Chemical Oxygen Demand) emission
in completing ultra-low emission transformation in 2020 and became an enterprise with Grade A environmental performance in (COD) discharge in wastewater was 91.23 tonnes, down 27% year-on-year. The
the same year; the Steel City Base completed ultra-low emission transformation in 2023 and became an enterprise with Grade emission intensities of COD and ammonia nitrogen were 0.005 kg per tonne of decreased by 27%.
A environmental performance in the same year. The Company has become the first super-large iron and steel joint enterprise in crude steel and 0.00016 kg per tonne of crude steel respectively, better than the
Shandong Province to achieve Grade A environmental performance across the entire iron and steel sector. During the reporting period, national Grade I standard for cleaner production.
the Company implemented the 2025 action special chapter of the "Three-Year Action Plan for Maintaining Grade A Environmental
Performance (2024-2026) " and carried out key environmental governance projects. Steel City Base
Steel City Base Steel City Base optimized its water intake model, adjusted water consumption structure, steadily increased municipal
reclaimed water usage, improved fresh water quality, and enhanced water use cost-effectiveness. Profile steel steelmaking
Steel City Base advanced 9 environmental governance projects. Three projects—standby coke oven pusher desulfurization, plant and special steel plant circulating water systems were adjusted to the energy power plant, achieving consolidated,
Environmental enhancement projects including upgrading and renovation of flue gas desulfurization and denitrification water chemical treatment was delegated to specialized companies for operation, strengthening operational control and
systems for No.1 and No.2 coke ovens and coke outlet dust removal flue gas desulfurization treatment are advancing as supervisory monitoring of circulating water. The Base continuously advanced wastewater reduction projects, and three projects
scheduled, with intrinsic compliance capability further enhanced. The Base conducted specialized desulfurization and were commissioned: the New Dynamic Zone 70 MW power generation circulating water wastewater supply to 3,800 m? blast
denitrification treatment and sulfur mass balance calculation for the 480 m? sintering machine, reshaping the leading furnace slag quenching, profile steel district rainwater-sewage separation domestic wastewater supply to profile steel 1,880
advantage of active coke process joint pollutant removal from sintering flue gas in the industry. Precise control operational m? blast furnace slag quenching, and large drainage ditch pump station rainwater recovery supply to profile steel 1,880 m?
schemes for environmental facilities were established, the fugitive dust intelligent management platform was migrated, and blast furnace slag quenching.
environmental air quality monitoring station terminals were improved, achieving 100% daily average compliance rate for 75
online monitoring facilities.
Rizhao Base
Rizhao Base
Rizhao Base established a "differentiated collection–graded treatment–cascading reuse" system. Through source-based clean-
Rizhao Base deepened environmental governance, implementing 6 key environmental sewage separation and pretreatment, the base installed 28 water treatment systems with online monitoring, and conducted
enhancement projects including Steelmaking Plant No.5 Continuous Caster fan deep end treatment with full external supply of concentrated brine. The base recycled 7 million tonnes of wastewater annually,
suction enhancement. The Base conducted ultra-low emissions further enhancement consolidating the industry's zero-discharge benchmark, with key indicators consistently exceeding the limits of GB 13456-2012
assessment, identifying 220 issues and establishing 242 remedial measures while and GB 19430-2013.
advancing implementation, establishing a green channel for implementation, further
consolidating ultra-low emissions results. The Base completed upgrades and Case? ? ? Steel City Base Power Generation Circulating Water Wastewater Supply to Blast Furnace Slag Flushing
renovations of 32 online monitoring devices, achieving hourly average compliance
rate exceeding 99.9% and data valid transmission rate exceeding 99.6%. The Base
In 2025, Steel City Base implemented the 70 MW power generation
strictly implemented pollutant discharge permit self-monitoring requirements, timely submitted pollutant discharge permit
circulating water wastewater supply project for 3,800 m? blast furnace slag
execution reports and environmental information disclosure, delegated annual environmental monitoring to qualified third-party
Flushing, redirecting external wastewater discharge from power generation
organizations, was recognized as Rizhao's first batch of pollutant discharge permit management benchmark enterprises, and
circulating water for use in the blast furnace slag Flushing process,
passed preliminary review as Shandong Province's pollution reduction and carbon reduction collaborative pilot unit.
achieving waste valorization and cascading utilization. The project reduced
wastewater discharge by 40 m?/h.
Case? ? ? Rizhao Base Implements New Semi-Negative-Pressure Benzene Removal Tower for Coal Gas Purification
Rizhao Base implemented a new semi-negative-pressure benzene removal Case? ? ? Rizhao Base Advances Wastewater Resource Utilization, Achieving Water Conservation and Harmless Disposal
tower for coal gas purification, using steam as the heat source for crude
Rizhao Base focused on wastewater resource utilization, implementing multiple technological modifications to achieve
benzene distillation to eliminate emissions of nitrogen oxides, sulfur dioxide, cascading wastewater utilization and consumption. Continuous casting wastewater was treated through multi-stage
and particulate matter generated from the combustion of refined coke oven reaction and sedimentation tanks, utilizing "dual-alkali" and "defluorination" technologies for reuse in steelmaking
gas and blast furnace gas, achieving environmental improvement goals. evaporative coolers as a substitute for fresh water, achieving zero discharge from continuous casting wastewater.
Additionally, cold rolling acidic wastewater was used in the steel slag hot briquetting process, consuming 185,000 m? of
acidic wastewater annually, substituting for fresh water in cooling and slag quenching operations, saving 750,000 tonnes
of water annually. This achieves resource utilization and harmless disposal of acidic wastewater, significantly reducing
industrial fresh water consumption and improving water resource utilization efficiency.
Wastewater Discharge
Going forward, the Company will continue consolidating wastewater zero discharge achievements, deeply advancing water utility
Shandong Iron and Steel has formulated and improved the "Regulations on Wastewater Discharge Control and Management and the
Measures for the Operation Supervision and Management of Integrated Wastewater Treatment Stations" in accordance with national centralized control center construction, conducting water balance testing, and achieving high-quality wastewater zero discharge.
laws and regulations. The Company actively implements the concept of the "Great Protection of the Yellow River," follows the work The Company will develop "two lists and one table" (toxic and hazardous substance list, critical locations and equipment list, on-
philosophy of "separation of rain and sewage, water conservation and emission reduction at the source, and full realization of zero site investigation record table), continuously optimizing lists based on actual production field conditions. The Company will optimize
and improve soil and groundwater self-monitoring point layouts, track changes in monitoring data trends, and prevent soil and
groundwater pollution and deterioration.
Impact, Risk and Opportunity Management
Strengthening Energy Conservation and Environmental Protection Training and Publicity
Pollutant emissions' impacts on company production and operations are primarily reflected in operational costs and corporate image.
The Company actively conducts enterprise-wide ecological civilization training and publicity month activities, enhancing employee
The Company, leveraging its "company-level, professional department, production facility" three-tiered environmental management
ecological environmental awareness and capability. In 2025, utilizing World Environment Day, the Company launched an energy
network, systematically manages the impact, risks, and opportunities of pollutant emissions.
conservation and environmental protection publicity month, calling for company-wide energy conservation and environmental
protection publicity activities supporting the construction of Beautiful Shandong Steel and Beautiful China. Meanwhile, the
Risk Opportunity Company conducted specialized training on hazardous waste standardized management, online monitoring management, and
others through organizing expert lectures and participating in industry conferences. Steel City Base conducted 2 large-scale
● I nvestment in advanced environmental protection
training sessions with over 500 participants; Rizhao Base organized 4 environmental protection training sessions.
equipment and technology can improve corporate
●R
egulatory and compliance risk: non-compliant Case??? Rizhao Base Environmental Protection Promotion with Community and Property Management
environmental performance and corporate image
emissions may result in regulatory fines or even
●R
e d u c i n g p o l l u t a n t e m i ss i o n s m a y q u a l i f y fo r
production suspension for remediation During the energy conservation and environmental protection publicity month, Rizhao Base partnered with Kuian
environmental tax incentives
●E
nvironmental impact and reputational damage: pollution Community and Bona Property Management to conduct environmental protection promotion activities in the Shandong
●E
stablishing sudden environmental event emergency
incidents or sudden environmental events may attract Steel residential area, promoting citizen ecological environmental behavioral standards and inviting citizen representatives
response plans and conducting emergency drills can
public attention and damage corporate image to visit Rizhao Base to personally experience the new image of modern green steel enterprises.
enhance environmental risk response capability and
prevention levels
Enhancing Response Capabilities
Shandong Steel adheres to safety and environmental protection bottom lines, classifying non-compliant emissions, environmental
penalties, and other environmental protection risks as major company risks. The Company invites professional agencies to identify
and resolve environmental protection risks, formulates environmental emergency response plans and conducts drills, strengthens
environmental protection publicity and training, and advances clean production initiatives to strengthen management of various
environmental protection risks and enhance environmental risk response capability. Targeting stakeholders including community
residents, the Company establishes normalized environmental monitoring and communication mechanisms, proactively disclosing
environmental information and responding to community concerns. During the reporting period, the Company experienced no
significant community complaints triggered by environmental pollution.
Advancing Cleaner Production
Environmental Emergency Plans and Drills
Shandong Steel actively promotes the creation of cleaner production environmentally friendly enterprises, and both Steel City
The Company establishes an "Emergency Response Plan for Sudden Environmental Events," building and perfecting emergency Base and Rizhao Base are China's steel industry cleaner production environmentally friendly enterprises. During the reporting
mechanisms for sudden environmental events to enhance the Company's capability and prevention level in responding to sudden period, the Company optimized production processes and operational procedures, employed clean raw materials, advanced
environmental pollution incidents. The Company conducts emergency drills for material spills, fires, environmental facility failures, cleaner production and process control technologies, and consolidated cleaner production achievements. All major air pollutant
radiation accidents, and other sudden environmental events. In 2025, Steel City Base organized 34 emergency response drills for emission indicators exceed Grade 1 standards of the cleaner production evaluation index system. Steel City Base passed the
sudden environmental events with cumulative duration of approximately 47.2 hours and approximately 760 participants; Rizhao Base national Ministry of Industry and Information Technology "Green Factory" re-examination.
organized 50 emergency drills with cumulative duration of approximately 50 hours and approximately 600 participants. Drills covered
critical risk areas including wastewater quality anomalies, wastewater treatment facility failures, radiation source loss, and hazardous Clean Transportation Ratio Further Increased
waste spills, employing realistic scenarios to focus on verifying plan practicality, command system coordination, and rescue team
practical capability, achieving full-coverage risk prevention and comprehensive emergency response capability enhancement.
In 2025, Steel City Base added 28 new-energy electric traction 100
Case??? Rizhao Base Radiation Source Theft Emergency Response Drill
vehicles, 9 electric dump trucks, 10 electric forklifts, and 2
electric loaders. Rizhao Base increased new-energy electric 90 87.45%
In September 2025, Rizhao Base's Plate Plant organized a specialized radiation emergency response drill simulating
vehicle transport by 2 million tonnes, raising new-energy
scenarios of radiation source theft and thickness gauge signal interruption. When operators discovered abnormalities,
electric vehicle transport proportion to 40.13%. By the end of the 80
they promptly reported them. The control room rapidly activated the specialized emergency response plan, coordinating
reporting period, Steel City Base achieved a clean transportation
with multiple departments to secure the scene, establish cordons, and preserve evidence. Various units coordinated
ratio of 81.74% and Rizhao Base 87.45%, both exceeding the 70
effectively and interfaced with superior departments, ensuring standardized handling with no secondary risks. The drill
verified plan operability, strengthened personnel emergency response and inter-departmental coordination capabilities,
Enterprises. 60
and enhanced awareness of radiation safety risk prevention and emergency reporting standards.
Steel City Base Rizhao Base
Metrics and Targets
Waste Management
In 2025, the Company fully completed annual pollutant emission targets set at year-beginning as well as mandatory environmental
protection indicators and anticipated targets. Pollutant comprehensive compliance rate, construction project environmental
Shandong Steel strictly complies with laws and regulations including the "Solid
protection "Three Simultaneities" execution rate, and environmental facility synchronized operation rate all reached 100%. Major
Waste Pollution Prevention and Control Law of the People's Republic of China,"
and above environmental pollution accidents were zero, environmental administrative penalties were zero. Sulfur dioxide, nitrogen Comprehensive utilization rate of
and in accordance with the "Pollution Control Standard for Storage and Disposal
oxides, particulate matter, chemical oxygen demand, and ammonia nitrogen per-tonne-steel emissions complied with total pollutant
discharge control requirements. Factory environmental air quality remained stable, and the Company continued maintaining Grade-A
of General Industrial Solid Waste" (GB18599-2020), has established "Solid Waste solid waste resources: 100%
Management Measures," "Hazardous Waste Management Measures," "Hazardous
Environmental Performance Enterprise status across all operations.
Waste Management Standards," and "Hazardous and General Industrial Solid Waste
Indicator 2025 Target Completion Status
Category 1 Material Disposal Management Measures." Through source-based
waste reduction control and professional recovery and utilization management, the
Compliant disposal rate: 100%
Continued Grade-A Company achieves 100% legal and compliant disposal or utilization of solid waste
Environmental Performance Company-wide "Maintain Grade-A" Environmental Performance and hazardous waste, with continuously improving resourceful utilization levels.
across all operations Recycling ratio: 98.82%
In 2025, the total amount of waste generated by the Company was 11.1052 million
tonnes, with a recycling and utilization rate of 98.82%. Among them, the generation
Pollutant Emissions Compliance Rate 100% 100% volume of general industrial solid waste was 10.9842 million tonnes, 100% of
which was recycled or disposed of by entrusted entities; the generation volume of
Construction Project Environmental hazardous waste was 121,000 tonnes, 100% of which was disposed of in compliance
Protection "Three Simultaneities" 100% 100% by qualified third-party enterprises.
Execution Rate
Environmental Facility Synchronized
Operation Rate
Clean Transportation Ratio 80% and above 80% and above Scrap Steel Recovery Rate % 100 100
Environmental Administrative Total Waste Generation 10,000 tonnes 833.95 1,110.52
Zero Zero
Penalties
——Generation volume of general industrial
Solid Waste Resourceful Utilization or ?? solid waste
Harmless Disposal Rate
?
R ecycling and utilization volume of
general industrial solid waste
Emissions of sulfur dioxide, nitrogen oxides,
In compliance with total
particulate matter, chemical oxygen demand,
Pollutant Emissions pollutant discharge control ——Generation volume of hazardous waste 10,000 tonnes 38.61 12.1
and ammonia nitrogen comply with total
requirements.
pollutant discharge control requirements.
? Harmless treatment volume of hazardous waste 10,000 tonnes 38.61 12.1
Indicator Unit Permitted Discharge 2025 Actual Emissions Recovered and Utilized Waste Ratio % 95.27 98.82
Total Particulate Matter Emissions Tonne 10,531.16 3,948.11
The Steel City Base has actively promoted the reduction of steel slag. For various types of steel slag from different sources such
Total Sulfur Dioxide Emissions Tonne 6,638.1 2,219.22 as converter red slag, splashing slag, desulfurization slag, residual pouring slag and electric furnace red slag, the Company has
reduced steel slag generation at the source by adopting high-quality lime, increasing slag retention, conducting refined steelmaking
Total Nitrogen Oxides Emissions Tonne 13,019.86 5,678.85 operations, strengthening internal primary sorting of splashing slag, and precisely controlling residual pouring volume according to
Chemical Oxygen Demand (COD) Emissions different steel grades. During the reporting period, the comprehensive utilization rate of solid waste resources reached 100%.
Tonne 219 91.23
in Wastewater
Case??? Efficient Utilization of Converter Steelmaking Dust Sludge Briquetting
Ammonia Nitrogen Emissions in Wastewater Tonne 21.9 2.95
Biochemical Oxygen Demand (BOD) Emissions Steel City Base continuously optimized converter steelmaking dust sludge briquetting utilization, gradually consuming
Tonne / /
in Wastewater previous inventory sludge. Combined with iron-to-steel ratio adjustments and hot metal temperature conditions
across regions, the Base, in accordance with the overall approach of inventory effective control, ultimate utilization in
Total Nitrogen (TN) Emissions in Wastewater Tonne 65.7 39.46 steelmaking, and appropriate process fine-tuning, established differentiated briquetting utilization target plans and
formed utilization models to achieve efficient circular reuse of dust sludge.
Total Phosphorus (TP) Emissions in
Tonne 2.19 1.33
Wastewater
The Rizhao Base focuses on building a "Zero-Waste Factory" and has formulated a three-step strategy of process reengineering,
intelligent revolution and gene remodeling, and has incorporated energy conservation and environmental protection indicators into Energy Utilization
departmental performance assessment. A cross-departmental "Zero-Waste Task Force" has been established to integrate production,
technical and environmental protection resources, and promote internal collaborative disposal by drawing on advanced experience.
Governance
A variety of solid wastes such as cold-rolled iron oxide pellets are reused on-site without being transported out of the plant, and
rolling line sludge is recycled independently, reducing the outsourced disposal of hazardous wastes and continuously improving the Shandong Steel's energy management framework consists of three
comprehensive utilization rate of solid wastes. In the steel slag treatment process, the converter steelmaking process is optimized levels: company-level, department-level, and facility-level. The
and low-slag smelting is adopted, so that the steel slag output per tonne of steel keeps decreasing. Company's Management/Executive Management serves as the decision-
making level for energy management, responsible for coordinating and
deciding major company energy matters. The Energy and Environmental
Rizhao Base Three Major Solid Waste Reduction Measures Management Department serves as the management/supervisory level,
comprehensively responsible for company energy management work
including revising and improving company energy management systems,
Converter establishing annual energy conservation work plans and supervising
Flux Substitution Bottom Raw Material
Quality implementation. Other departments and production facilities are
Implementation Blowing
Improvement responsible for implementing specific energy work. Both Steel City Base
Optimization
and Rizhao Base have achieved ISO 50001 Energy Management System
certification with 100% certification coverage. Energy Management System Certification
Using lightly-roasted dolomite The bottom blowing mode of the converter Diversified scrap steel procurement The Company strictly abides by national laws and regulations, and
to substitute for lightly-roasted has been changed from clustered type to has formulated such management systems as the "Energy Conservation Target Management Measures", "Energy Review and
with clear standards, and all molten
magnesia balls, total flux consum- annular gap type bundle form to ring-gap Improvement Management Measures", "Energy Performance Parameter Management Measures", "Energy Statistics and Monitoring
iron slag shall be thoroughly rem- Management Measures", and "Energy Dispatching Management Measures". Adhering to the philosophy of "System Concept, Scientific
ption reduced to 41 kg/t lowering form, with annular gap type large bottom
oved to reduce slag carryover in hot Concept, Value Concept" and the energy conservation approach of "Systematic Energy Conservation, Scientific Energy Utilization
total slag volume. blowing promoting the rate of carbon-
oxygen reaction in the smelting process, metal. and Efficiency Improvement", the Company takes management-based energy conservation, collaborative energy conservation and
reducing endpoint oxygen content by technology-based energy conservation as the starting points to challenge the limit of energy consumption, and regards energy
approximately 40 ppm, reducing total iron efficiency improvement as an important path to achieve green and low-carbon transformation.
in slag by 1.1%, and lowering slag volume.
Strategy
Case??? Rizhao Base Actively Creating "Zero-Waste Factory" Ultimate Energy Efficiency
The Company has continuously deepened the ultimate energy efficiency improvement project. More than 74% of the production
Rizhao Base systematically advanced a three-tiered "reduction-reuse- capacity at both the Steel City Base and Rizhao Base exceeds the benchmark energy efficiency level. The Steel City Base’s “Dual
regeneration" management system, reducing per-tonne-steel solid waste Carbon Best Practice Energy Efficiency Benchmark Demonstration Plant" has entered the public notice procedure. The Rizhao Base
generation by 6.4%, and achieving full-process digitalized waste reduction was successfully recognized as a “Dual Carbon Best Practice Energy Efficiency Benchmark Demonstration Enterprise" in 2024, won
with steelmaking steel slag and hot rolling shear loss reduced by 14% and the title of “Energy Efficiency Leader" in the iron and steel industry in Shandong Province in 2025, and was selected into the 2025 List
process awarded the “Leader" title.
The Company has adopted the innovative dual-track model of “in-plant
recycling + social collaboration, "consuming 1 million tonnes of social
scrap steel annually. It has pioneered a “real-time generation and real-
Steel City Base
time clearance "dynamic zeroing model for hazardous waste, and built a
grid-based storage system consisting of “on-site hazardous waste bins
+ comprehensive warehouses”. Relying on intelligent technologies, the Company has realized full-life-cycle traceability Steel City Base actively advanced energy-conservation technology application, cumulatively reducing comprehensive energy
and visual monitoring of hazardous waste, and increased the reuse rate of waste ceramic balls by more than 50%. An consumption per tonne of steel by 44 kg standard coal equivalent over three years. The Base formulated the Energy System
environmental performance reward system has been established, and ecological education activities have been carried out Cost Reduction and Efficiency Increase Three-Year Action Plan, sorting out various energy-conservation measures for
improving gas utilization efficiency, reducing electricity consumption, improving waste heat recovery and utilization, reducing
to build a comprehensive solid waste treatment and resource recycling system.
fresh water consumption and minimizing wastewater treatment, and continuously deepening energy efficiency improvement work.
Standardized Hazardous Waste Management
Rizhao Base
Shandong Steel strictly aligns with the National Hazardous Waste List and implements full-process control over hazardous
waste generated in the production process, including waste mineral oil and mineral oil-containing waste, waste activated carbon, Rizhao Base built an integrated "process energy conservation + technological innovation + management optimization"
polychlorinated (brominated) biphenyl waste, waste acid, waste alkali, and various distillation residues generated in the coke and system. Starting in May 2024, the base launched comprehensive, three-dimensional grid-based extreme energy efficiency
coke by-product recovery process. The Company adheres to the principle of "prevention first, addressing both root and symptoms, diagnostic work, establishing 59 process-specific energy conservation projects and eight general technology categories, with
anticipated technology-based energy conservation of 182,000 tonnes of standard coal equivalent. During the reporting period,
and standardized management", implementing the disposal principles of "clear division of responsibilities with each bearing
the base formulated and released the 2025 Extreme Energy Efficiency Creation Leadership Action Plan, systematically sorting
responsibility" and "reduction, resourceful utilization, and harmless treatment" for the standardized management and safe disposal key energy conservation measures across management-based, technology-based, and process-based energy conservation
of hazardous waste. dimensions, and advancing 16 energy conservation projects, among which 8 were commissioned, cumulatively realizing
In accordance with the requirements of the Pollution Control Standard for Hazardous Waste Storage (GB1859 7-2023), the Company
sintering processes maintain a 100% benchmark achievement rate for energy consumption. The converter process has been
has built standardized hazardous waste temporary storage rooms for the temporary storage of hazardous waste. According to the awarded the Shandong steel industry and national-level energy efficiency "Leader" designation, with multiple key indicators
annual hazardous waste management plan, the Company tenders to qualified third parties for disposal using methods including C5, including per-tonne-steel comprehensive energy consumption and converter gas recovery consistently maintaining leading
R4, R9, and D10, with the entire process being legal, compliant, traceable and verifiable. domestic levels.
Rizhao Base comprehensively advanced gas extreme recovery utilization and efficient value-added utilization, reducing blast furnace
Case??? Rizhao Base Blast Furnace 2 and Converter 2 Honored as "Champion Furnaces"
gas venting rate to 0.05%, a 37.5% decrease from 2024's 0.08%. Converter gas recovery reached 0.94 GJ/t, a 0.02 GJ/t increase year-
on-year. Surplus gas supplies self-generation power plants with co-firing gas ratio of 12.2%. The base established a coke oven gas
In July 2025, the benchmarking competition results for national key large steel production equipment energy conservation utilization value-maximization model, prioritizing coke oven gas for liquefied natural gas (LNG) and synthetic ammonia production,
and consumption reduction were announced. Rizhao Base's Blast Furnace 2 was honored as a "Champion Furnace," achieving efficient carbon-containing resource utilization and reducing annual carbon emissions by approximately 28,000 tonnes. In
Converter 2 was honored as a "Champion Furnace," and Sintering Machine 2 was honored as a "Pioneer Furnace." 2025, the LNG process utilized 590 million m3 of coke oven gas.
Improving Self-Generated Power
Case??? Rizhao Base Converter Process Achieves Provincial Steel Industry and National Energy Efficiency "Leader" Recognition
Steel City Base extremely enhanced self-generated power. In
Power generation of Gangcheng Base: 3.27 billion kWh
In recent years, Rizhao Base's converter process energy generation ratio of 76%, an increase of 3 percentage points year-
consumption indicators continuously improved. In 2025, on-year. Rizhao Base follows the principle of "matching heat supply Proportion of self-generated power: 76%
Rizhao Base sorted 1,180 key data points across 17 to demand, making full use of heat energy, matching temperature
categories, and through scientific data and significant to application, and realizing cascaded utilization," and has built
energy conservation achievements, became the provincial a cascaded utilization system of "power generation – process Waste heat and residual energy power generation of
steel industry benchmark for converter process energy
efficiency, while being selected for the 2025 key industry
heat – domestic heat – waste heat storage". In 2025, the power Rizhao Base: 1.091 billion kWh
generation from waste heat and residual energy reached 1.091
energy efficiency "Leader" enterprise list jointly released billion kWh, and the power generation per unit product remained
by the Ministry of Industry and Information Technology, at an advanced industry level.
National Development and Reform Commission, and
State Administration for Market Regulation.
Rizhao Base implemented 5 converter energy conservation measures, completed intelligent renovation of steel ladle bakers
to improve energy efficiency and equipment stability, and innovatively applied low-carbon resourceful smelting technology,
with jointly tackled technical projects receiving first prize in the National Machinery, Metallurgy, and Building Materials Case??? Steel City Base Advances 1.2 Million Tonne Pellet Plant Waste Heat Recovery and Utilization Project
Industry Employee Technical Innovation Achievement Awards. The base simultaneously completed 10 related renovations
improving converter gas recovery calorific value.
Steel City Base's 1.2 million tonne pellet plant waste heat recovery and utilization project is advancing steadily. The project
Additionally, the base established 5 lean management and control models, implemented energy metering management includes vertical cooling furnace coolers, blowers, steam transmission pipelines, electrical distribution systems, perimeter
systems, achieved 100% equipping of converter process energy metering instruments, and relied on new converter hot water supply piping, and steam pipes. Hot pellet ore is loaded into closed vertical furnace chambers through large-
equipment advantages for precise management and control, further optimizing process energy efficiency. angle chain-bucket elevators. High-temperature flue gas undergoes dust reduction through cyclone separators, with
portions entering waste heat boilers for steam recovery and portions entering denitrification supplementary heating
furnaces for combustion support. Upon completion, the project will recover 87,100 tonnes of steam annually, reduce gas
consumption by 2%, and decrease carbon emissions by 31,800 tonnes.
Collaborative Energy Conservation
Shandong Steel fully leverages the Baosteel integrated synergistic support platform to deepen collaborative cooperation and solidly
advance synergistic energy conservation and value creation work, achieving remarkable results in key areas such as energy recovery
and utilization, continuously improving the enterprise's energy utilization efficiency and supporting green low-carbon development.
Focusing on the core goal of energy conservation and consumption reduction, Steel City Base actively implemented a number of Renewable Energy Expected Power Consumption Structure of
synergistic support projects, strengthened the implementation of energy-saving measures, effectively exerted synergistic advantages, Rizhao Base in 2026
Shandong Steel actively explores renewable energy utilization.
and achieved significant energy-saving results, providing strong support for the enterprise's carbon and consumption reduction.
Steel City Base conducted on-site surveys of factory buildings
With the help of the Baosteel synergistic platform, Rizhao Base has orderly advanced relevant optimization and upgrading projects,
and structures, calculating a total roof area of approximately 1.5
realizing two-way empowerment of safe production and energy efficiency improvement, which not only firmly holds the bottom line of
million m? across the entire zone with an estimated photovoltaic
safe production, but also effectively improves the operational energy efficiency of equipment, further consolidating the foundation for
installation area of over 600,000 m?. During the reporting period, Green Power
the enterprise's green development. Conventional
the construction of a 14.49 MW photovoltaic power generation
project commenced, with expected commissioning in 2026. The
Efficient Waste Heat Recovery Base established a research task force to conduct in-depth 71.7%
research on green electricity and green certificate trading rules.
Shandong Steel, through implementing comprehensive, full-coverage, and all-dimensional energy conservation renovations,
Rizhao Base plans a 28.3% green electricity consumption ratio
continuously advances waste heat and residual energy extreme recovery technology. Steel City Base maintains zero flaring of blast
in 2026, achieving a breakthrough "zero" in green electricity
furnace gas and coke oven gas with extreme converter gas recovery, completing 0.78 GJ/t annually. The base constructed steam
consumption through the purchase of green certificates.
pipeline from the medium section production line area to the old plant area, integrating large heating furnace waste heat steam into
converter waste heat power generation utilization, eliminating steam venting, reducing annual steam venting by 70,000 tonnes, and
reducing CO2 emissions by 7,800 tonnes.
Water Resource Utilization
Water Conservation and Utilization Measures
Water Resource Management System
Steel City Base adheres to the policy of "source reduction, process cascading, end treatment,
Shandong Steel strictly implements the national Water Intake Permit Management Measures, establishing a "top-level coordination, and recovery utilization" and builds a water-saving model of "diversified resource development,
hierarchical responsibility, and universal participation" water resource management organizational framework. The company systematic consumption reduction, and refined management and control". Reclaimed water reused:
management level serves as the decision-making level, the Energy and Environmental Management Department as the management/
supervisory level, and the energy power plants and related facility departments as the implementation level, with clear departmental 7.92 million m?
responsibilities at each level forming a closed-loop management mechanism. The Company established Water System Management In terms of management, it built a dynamic water intake model, conducts
Measures, Water Supply, Consumption and Water Resource Management Measures and other systems, improved the statistical
regular water balance testing, improves the three-tiered water metering
accounting and metering system, and incorporated water consumption and conservation indicators into performance evaluation to
network to achieve precise control. Coking wastewater reuse
strengthen responsibility implementation.
In terms of water source expansion, it recycled 7.92 million cubic meters of 92%
rate:
Strengthening Planning and Water Source Protection reclaimed water in 2025, the coking wastewater recycling rate exceeded 92%,
reducing wastewater discharge by 466,000 tonnes annually, and collected
Wastewater emission
The Company strictly adheres to water intake (consumption) quota rainwater to supplement production water.
declaration, rationally plans and calculates water intake, and takes water reduction: 466,000
according to plans. For new construction, modification, and expansion In 2025, In terms of system optimization, it advanced process cascading water use and
tonnes
projects, water conservation facilities are built concurrently. Combined circulating water recovery and utilization, implemented equipment and process
with the Yellow River Protection Law of the People's Republic of China, the Company's total water consumption
transformation, and a number of measures saved more than 1 million tonnes
Shandong Yellow River Basin Ecological and Environmental Protection
Specialized Plan, and the Company's water resource management targets
was 45.07 million m?, of fresh water annually.
and plans, Shandong Steel comprehensively advances the "Great Yellow
River Protection" initiative, comprehensively strengthening water-saving
technology research, development, and application, implementing multiple with fresh water consumption at 41.22 Rizhao Base relies on the integrated water system management and control platform to realize
million m?.
water conservation measures and projects, and continuously improving
full-process refined control of water use and dynamic analysis of process water use efficiency,
water resource utilization efficiency.
Neither the Steel City Base nor the Rizhao Base involves key protected The fresh water consumption per ton of steel
timely rectifying water leaks, and providing data support for water-saving technological Fresh water saved: 3
areas, and they earnestly fulfill their ecological protection responsibilities. transformation and indicator optimization.
million tonnes
The Steel City Base is located in the Yellow River Basin, giving priority to was 2.26 m?
the use of surface water and unconventional water to reduce groundwater
exploitation and strengthen water source protection. In the future, it will It explored a seawater desalination water-saving path and built a seawater
Wastewater reuse rate
firmly implement the requirements of the Opinions on Comprehensively the water recycling rate remained above desalination project with a daily capacity of 20,000 m3, which converts seawater
for the whole plant:
Promoting Ecological Protection and High-Quality Development of the 98.48%. into industrial water through advanced membrane treatment technology, saving
Yellow River Basin and continuously tap water-saving potential. The Rizhao
Base implements differentiated water supply and source water reduction
conservation and ecological protection.
management, setting a benchmark for ecological protection in the steel
industry. The Base advanced wastewater resource utilization, purifying wastewater into
pure water for reuse in furnaces through more than 60 process steps. At present,
Case??? Rizhao Base Intelligent Water-Saving Demonstration the factory-wide wastewater recycling rate reaches 100%, the per-tonne-steel
fresh water consumption leads the industry, and the annual recycled water
Rizhao Base has deeply cultivated the field of industrial water- volume is equivalent to that of the West Lake.
saving and become a model for regional water resource
protection. Its developed "Steel Rolling Turbid Circulating
Water System Equipment Treatment Capacity Improvement Water-Saving Culture Publicity
Technology" was selected as a typical case in the Catalogue
of Industrial Water-Saving Technologies, Processes and
Equipment Encouraged by the State (2025 Edition) by the The Company attaches great importance to training all employees
Ministry of Industry and Information Technology. This on water use efficiency to enhance water-saving awareness across
technology addresses the pain points of industrial turbid the enterprise. The Company carries out a series of activities in 5 special training sessions
circulating water treatment in the industry, achieving dual improvement of water-saving and production stability through conjunction with important nodes such as World Water Day and China
optimization such as synergistic treatment and equipment upgrading. At the same time, it improved the water system Water Week. In 2025, the Company organized 5 specialized training
control and realized zero wastewater discharge during blast furnace maintenance. The Base upgraded the intelligent
water management phase one through intelligent enhancement, adding an intelligent dispatch module, clearing water
sessions and 13 online promotions. It creates a good atmosphere
of "water conservation by everyone, everywhere" through posting
consumption information across processes, improving the factory-wide water dispatch response speed by 50%, and slogans and holding special activities.
fortifying the operation and maintenance defense line coupled with intelligent inspection. It established a three-tiered
water circulation system with a 100% wastewater recycling rate, providing a practical sample for the steel industry.
Impact, Risk and Opportunity Management
Circular Economy
The Company's production and operation consume various energy sources including water, electricity, coal, and gas. The impacts
of energy utilization on company production and operations are primarily reflected in operational costs and corporate image. The
Shandong Steel actively leverages circular economy industrial cluster advantages, establishing a standard system encompassing
Company, leveraging its "company-level, professional department, production facility" three-tiered energy management network,
five recycling chains: solid waste treatment, water resource cascading utilization, gas resource utilization, waste heat cascading
systematically manages the impacts, risks, and opportunities of energy consumption and resource utilization.
utilization, and coal chemical product deep processing, achieving resource-efficient utilization.
Risk Opportunity Solid Waste Recycling
● I nvestment in equipment upgrade and renovation, utilizing The Company actively advanced rotary kiln fines return-to-production utilization, blast furnace slag resourceful utilization, and high-
advanced energy-conservation technology, can reduce value utilization of carbon-containing and iron-containing resources such as coke-making dust ash and scale. Solid waste resourceful
●R
egulatory and compliance risk: energy consumption utilization levels continuously improve with achievement of 100% resourceful utilization of blast furnace slag and iron-containing
energy consumption, lower enterprise operational costs,
above relevant standards, unauthorized water intake dust sludge, high-value utilization of desulfurization slag, and effective promotion of cross-industry solid waste resource cycling and
and enhance environmental performance and corporate
and use may result in regulatory fines utilization.
image
●R
esearch and development of new low-carbon energy
●A
ctive development of renewable energy, optimizing
sources (such as hydrogen energy) may increase
enterprise energy structure, supporting enterprise carbon
company R&D investment
reduction, and enhancing enterprise competitiveness Strengthening Rotary Kiln Fines Return-to-Production Utilization
●E
nvironmental impact and reputational damage risk:
●S
cientific energy management and utilization benefits
In accordance with rotary kiln fines generation conditions and zero-inventory management requirements,
if energy-related pollution incidents occur, it will
establishing a positive image, winning the trust of
attract public attention and damage corporate image the Company researched and optimized sintering charging models and increased rotary kiln fines utilization.
customers and the public, and enhancing enterprise
industry influence and brand value During the reporting period, rotary kiln fines return-to-production utilization reached 65,900 tonnes.
Blast Furnace Slag Resourceful Utilization
Metrics and Targets
Shandong Iron and Steel tracks and monitors indicators such as comprehensive energy consumption per tonne of steel in real time.
The Company constructed slag micro-powder production lines, achieving 100% resourceful utilization
of blast furnace slag.
In 2025, the Company’s comprehensive energy consumption per tonne of steel was 563.64 kg of standard coal per tonne of steel, and
fresh water consumption per tonne of steel was 2.26 m3 per tonne of steel, both meeting the annual targets.
Dust Ash/Sludge Recovery and Utilization
Company Future Resource Utilization Targets The Company continuously promoted steelmaking dust ash briquetting return-to-steelmaking utilization.
Various zinc-containing dust ashes were processed through rotary kilns for return-to-sintering utilization.
Through increasing comprehensive resource utilization efforts, reducing external disposal ratio, Dust ashes with minimal harmful elements were directly returned to sintering. achieving 100% utilization
particularly improving bulk solid waste return-to-production utilization rate and product conversion of iron-containing dust sludge.
rate, and creating "zero-waste factories." By 2030, the Company aims to achieve solid waste return- High-Value-Added Desulfurization Slag Utilization
to-production utilization rate of 38% or above, reduce per-tonne-steel comprehensive energy
The Company independently developed desulfurization slag graphite carbon extraction technology, achieving
consumption by 4.5% compared to 2025, and reduce per-tonne-steel fresh water consumption by
wastewater discharge from Steel City Base, and achieve Rizhao Base high-quality wastewater zero
discharge targets.
capacity of 100,000 tonnes, enabling extraction of over 3,000 tonnes of graphite carbon with purity
exceeding 90% annually and achieving high-value-added desulfurization slag utilization.
Exploring Cross-Industry Solid Waste Resource Utilization
The Company actively explored new models for cross-industry solid waste resourceful utilization. Through
technological innovation and process optimization, the Company achieved consumption of red mud generated
in the aluminum electrolysis industry within the steel industry. In 2025, the Company consumed 124,900
tonnes of red mud, effectively promoting cross-industry solid waste resource cycling and utilization.
Packaging Materials The green coverage rate of the Steel City Base
has been raised to 28.36%, with continuous
improvement of the ecological environment. Greening Milestones of Steel City Base
Shandong Iron and Steel strictly implements steel packaging standards. Each production plant has formulated specific management
The Dawenhe National Wetland Park (AA) at the
and usage rules for packaging materials in light of packaging quality and business needs. Adhering to the principles of reduction and
recyclability, the Company has reduced the consumption of packaging materials by adopting reduced packaging, improving the control
Steel City Base is a model of integrated factory- Increased factory green coverage rate to 28.36%, achieving
urban governance, home to wild animals such as continuous improvement of the ecological environment
precision of packaging equipment, and increasing the use of recyclable packaging materials. In 2025, the total consumption of various
white storks, egrets and mallards, which vividly
packaging materials was approximately 40,000 tonnes.
demonstrates the beauty of biodiversity.
Case??? Steel City Base Green Action, Protecting Ecological Environments
In March 2025, Steel City Base, with the theme of "Laying a Solid Foundation for
Green Development and Striving to Create a New Situation in the Steel Industry",
organized a 2025 volunteer tree-planting activity, planting more than 1,000
Weight-Reduction Packaging Adopting Circular Materials Improving Equipment Control Precision
saplings. The sapling combination followed the principle of "greenery visible year-
round, flowers visible three seasons, distinct layering", selecting northern tree
Using high-strength materials achieves Implementing a packaging material Enhancing strapping equipment control species such as persimmon, cherry blossom, and dwarf cypress to enhance the
both ensuring packaging quality and substitution strategy, keeping pace with precision, such as length and width ecological landscape quality of the factory and its surrounding areas. Through
reducing packaging material usage. industry development trends, increasing cutting precision for various packaging related activities, 64,500 m? of supplementary planting was completed, with increased environmental investment and
Detailed segmentation of strapping recycled packaging material usage, materials, reducing overlap quantity, remarkable results in the factory's greening environment.
length categories reduces the overlap improving the packaging material and thereby saving packaging material
length per strapping and minimizes circular utilization rate, and reducing consumption.
waste. environmental impact.
Rizhao Base is a coastal steel production base surrounded by 2.1 million m? of ecological green corridors, with plantings of 150,000
trees and 500,000 shrubs, attracting more than 20 migratory bird species. It has transformed from a manufacturing facility to a green
landmark with a "steel plant botanical garden". The base has successively received honors including "AAA-Level Industrial Tourism
Scenic Area", "National Green Factory", and "Steel Industry Green Development Benchmark Enterprise". Relying on 1.8 kilometers
of natural coastline, it has built a steel cultural-tourism landmark and become a regional green name card. It has received a total of
Ecosystem and Biodiversity Conservation
more than 200 visiting batches, actively demonstrating the achievements of green intelligent manufacturing to the society.
Biodiversity is the foundation of human survival and development, closely related to food safety, quality of life, economic development,
and disease prevention. Shandong Steel strictly complies with international, national, and regional biodiversity protection laws and
regulations, taking active measures to ensure all business activities comply with regulatory requirements and proactively avoiding AAA-level Industrial Tourist National-level Green Factory Benchmark Enterprise for Green
Attraction Development in the Iron and Steel
operations in high-biodiversity-value areas. Simultaneously, the Company strictly adheres to ecological red lines, refraining from
Industry
construction near national ecological protection areas, and taking concrete action to maintain ecological balance.
During the reporting period, the Rizhao Base was selected into the first list of environmental protection facilities open to the public
by the Ministry of Industry and Information Technology. Nine distinctive sites were opened, including the Intelligent Control Center,
integrating science education, cultural experience and red education. In the future, it will showcase the achievements of green
transformation through regular open activities.
achievements in R&D system construction, digital and intelligent transformation, supply chain security assurance, and product quality
Innovation-Driven Development
enhancement. At the same time, the Company consolidates data security safeguards, focuses on protecting employee rights and
interests, and actively practices social responsibilities such as rural revitalization and community co-development. Through multi-
Intelligent Manufacturing
dimensional collaborative development, the Company continuously enhances its core competitiveness, drives high-quality development
to greater depths, and achieves alignment between enterprise development and social value.
Supply Chain Security
Product and Service Safety and Quality
Data Security and Privacy Protection
Employees
Occupational Health and Safety
Social Welfare
Innovation-Driven Development Strategy
Shandong Steel continues to deepen the coordinated development of the Jinan Steel City Base and Rizhao Base, integrating
comprehensive resources including location, capital, technology and talent. Focusing on five major product categories—thick plates,
section steel, special and superior steel, rebar, and hot/cold rolling products—the Company strengthens the competitiveness of
Shandong Steel places innovation at the core of its strategy, advancing in the directions of "high-end, high-efficiency, intelligent, and advantageous products such as plates, section steel and special and superior steel. Concentrating on advanced steel material R&D,
green" by establishing an open and collaborative R&D system, driving product upgrades and process innovation, and injecting strong breakthroughs in key common technologies and digital and intelligent transformation, the Company drives innovation resources to
momentum for the sustainable development of itself and the industry. converge on core fields and key links, achieving synchronized enhancement of innovation value and industrial value, and facilitating
the steel industry's transition toward high-end manufacturing and green, low-carbon development.
Governance Impact, Risk, and Opportunity Management
The Company integrates risk prevention and opportunity capture throughout the entire technology and innovation process,
The Company continues to build a technology and innovation management system with clear responsibilities and authority, establishing a comprehensive and multi-level risk and opportunity management system. It precisely assesses and mitigates various
collaborative sharing, efficient operations, and vibrant energy. Oriented toward value creation and with project topics as the potential risks in R&D, management, and technology, maintains the bottom line of innovation development, and proactively explores
vehicle, the Company focuses on the core responsibilities of "advanced steel material new product R&D, key common technology and integrates development opportunities from internal and external resources and policy enablement. This optimizes innovation
development, and economic strategy research". Through a flat organizational structure, unified management, professional integration, resource allocation, ensures controllable risks and effective opportunity utilization, and provides safeguards for the implementation of
the technology and innovation strategy.
and integrated operations, the Company enhances professional R&D capabilities, promotes collaborative technological breakthroughs
across bases, cultivates industry experts and distinctive innovation teams, and builds an integrated R&D system that "aggregates and
Risks Risk Description Mitigation Measures
empowers, conducts unified research, serves the front line, operates efficiently, and creates value". The Planning and Technology
Department is the responsible department for the Company's technological innovation, while the Shandong Iron and Steel Research Strengthen multi-dimensional assessment and full-process verification on the
Institute/Technology Center and the Rizhao Company Iron and Steel Research Institute are the R&D implementation institutions. demand side. In the project initiation stage, conduct in-depth research on market
demand and on-site application scenarios to enhance the practicality and site-
Focusing on key links such as project initiation, fund usage, evaluation and incentive, patent application, and achievement reporting,
fitting of R&D outcomes. Establish an industry technology research system to
the Company has formulated and revised 11 management systems including the "Scientific Research Project Management R&D direction deviates from market demand, track cutting-edge technological developments and trends in the international
Measures," "New Product Development Management Measures," "Scientific Research Project Evaluation and Incentive Standards," Technological R&D site requirements, or industry trends, easily steel field, ensuring R&D direction aligns with industry mainstream. Deepen
"Patent Management Measures," and "Scientific and Technological Achievement Management Measures," continuously optimizing Direction Risk causing ineffective investment and waste of coordination and collaboration with downstream users and site operations,
management processes and clarifying responsibility divisions to achieve standardization and efficiency in technology and innovation R&D resources. jointly conduct project-based R&D to achieve precise matching between R&D
demand and practical application. Through pilot and intermediate-scale tests,
management.
progressively verify process feasibility and economic viability, strictly control
The Company has established multi-level technology and innovation platforms at national, provincial, and municipal levels, including R&D investment pace, and avoid large-scale blind investment causing resource
a National Enterprise Technology Center and Shandong Provincial Key Laboratory, and has built joint laboratories and collaborative loss.
innovation centers with key domestic universities, research institutes, and downstream customers, fully integrating internal and
Technology barrier breakthroughs face
external R&D resources to provide solid platforms for product development and technological breakthroughs. difficulties. Core processes or equipment Strengthen full-element assurance for technology breakthroughs. In the project
for advanced steel depend on imports, initiation stage, review the overall level of the project team to ensure project
Technology
with long R&D cycles and high costs, objectives match the team's overall capability. Apply digital technologies such as
Bottleneck Risk
easily causing R&D progress lag due to digital twin for process parameter simulation and verification, reducing trial-and-
Science and TechnologyInnovation Management System unsolved technical problems or changed error costs in actual production.
of Shandong Steel
implementation conditions.
Introduce professional scientific research project management informatization
Lack of professional scientific research
R&D System Management Systems tools, build a digital management platform covering the entire R&D process,
Management Structure management systems, resulting in
achieve real-time monitoring of R&D progress, transparent data management
● Collaborative technological Formulation and Revision
● R&D Management cumbersome R&D management
● Flat structure and cross-departmental collaboration, and improve R&D management efficiency.
breakthroughs across bases of Multiple Management Efficiency Risk processes and low efficiency, making it
Unified management Establish a standardized technical documentation library and knowledge
Innovation Platforms
●
Cultivation of industry experts Systems difficult to achieve efficient tracking and
●
management system, normalize R&D data archiving, sharing, and succession,
● Professional integration control of R&D processes.
● Distinctive innovation teams and prevent knowledge discontinuity in core technologies.
● Integrated operations
Taking advantage of the unified deployment opportunity for
Promote the application of scientific research project management systems to
information technology construction within the Group company,
achieve real-time monitoring of R&D progress, data sharing and collaboration,
initiate the development of a scientific research management
and improve R&D management efficiency.
Platform Construction
Multi-level technology and innovation platforms; establishment of joint
laboratories and collaborative innovation centers with key domestic and foreign
Using academic societies and industry associations as important platforms for
universities, research institutes and downstream customers
cooperation, deepen external technical exchange and industry collaboration,
Leveraging the opportunity of executive changes in various
actively organize and participate in high-end academic conferences and technical
academic societies and industry associations, participate
seminars, promote the sharing and transformation of R&D achievements within
in high-end academic conferences and technical exchange
the industry, strengthen industry talent exchange and capacity building, and
meetings.
provide intellectual support for the Company's technology innovation upgrade and
industry high-quality development.
Cultivation of Innovation Talent Case??? Leading the Formulation of Intelligent Manufacturing Industry Standards
The Company has revised technology and innovation management systems In 2025, the Company obtained 13
China Machinery,
In 2025, the Company led the formulation of 3 industry standards in the field of intelligent manufacturing, including YB/T
such as the Scientific Research Project Management Measures and Scientific
Research Project Evaluation and Incentive Standards, building a multi-
Metallurgy and Building Materials Industry Requirements for Intelligent Control System for Ladle Refining (LF)," and YB/T 6396-2025 "Technical Requirements for
dimensional evaluation system and position performance assessment model
employee innovation Online Steel Plate Contour Detection System," systematically standardizing the design, development, and application
with a prominent focus on value creation, and optimizing incentive mechanisms
requirements of intelligent control systems for related processes, which is of significant importance for the intelligent
to effectively stimulate innovation vitality. In 2025, the Company strictly adhered
manufacturing transformation and upgrading of the steel industry.
to academic and ethical standards, upheld professional ethics, practiced
high-quality technology innovation requirements, and fostered a culture of
including special first prize, first prizes,
technology serving good and established supporting mechanisms. Focusing
on key core technology breakthroughs, through major technology campaigns
and "challenge and reward" initiatives, the Company accelerated the cultivation
second prizes, and third prizes Scientific and Technological Innovation Achievements
of leading talent and innovation teams in practice, continuously stimulating The Company continuously focuses on practical demand from "sites and markets" to conduct process and product R&D, achieving
talent innovation potential. In 2025, the Company won 1 gold award and 2 silver awards in the "Elite Talents Strengthening Shandong" breakthroughs in multiple key material fields, supporting high-end manufacturing and green transformation.
Shandong Province Youth Innovation and Efficiency Exchange and Display Activity.
Section Steel Field
In 2025, the Company continued to increase R&D investment, with total R&D investment of 3,538 million yuan, representing 5.26%
of main business revenue. A total of 151 scientific research projects were initiated, with 1 national key R&D project application and 1 Anchoring on the directions of high-end, differentiation, green, and series development, the company strengthens the multi-
Taishan Industrial Leading Talent Project application in Shandong Province. functional advantages of H-section steel, builds distinctive features of special-shaped section steel with complex cross-sections, and
continuously consolidates leading advantages in section steel for marine engineering, mechanical manufacturing, and rail transit.
Marine/offshore engineering section steel has achieved breakthroughs in core technologies of low-temperature resistance, high
strength and toughness, and high cleanliness, developing high-performance section steels such as Q460MD, C390-6, and Q355NF,
Intellectual Property Protection
leading customer material upgrades. Section steel for mechanical applications pioneered unbalanced compensative rolling theory,
conquering large-size highly asymmetric cross-section forming and property integrated control technology, with high-end track steel
The Company has established an intellectual property management framework with "leading department coordination, departmental
for super-large equipment breaking foreign monopolies, and multiple types of gantry section steel such as C142 being launched
synergy, and full-staff participation", ensuring that intellectual property management covers the entire R&D, production, and
globally for the first time, supporting independent and controllable core materials for domestically-made equipment. Maglev track
operation processes. The Planning and Technology Department, as the leading department for intellectual property management, section steel has solved surface quality control challenges through rolling process innovation, filling international gaps.
comprehensively oversees the application, maintenance, and other management of various types of intellectual property including
patents, software copyrights, and trademarks. Focusing on core intellectual property types and in combination with the Company's
Confidentiality Management Measures, the Company has formulated specialized management systems including the Patent
Management Measures, Technical Secret Management Measures, Software Copyright Registration and Management Measures,
and Trademark Management Measures, and is actively promoting the construction of an intellectual property management system
aligned with GB/T 29490-2013 Enterprise Intellectual Property Management Norms, forming a refined system covering the entire
process of "creation, acquisition, and maintenance".
In 2025, the Company filed 339 patent applications, including 277 invention patents and 62 utility model patents. As of the end of the
reporting period, the Company cumulatively held 1,704 valid patents, including 1,174 invention patents.
Formulation of Industry Standards
Special Steel Field
The Company actively participates in the formulation and revision of standards at various levels, leading industry normative
The Company concentrates efforts on new energy vehicles, wind power, and molds industries, increasing development of high-end
development through its technical capabilities. In 2025, the Company chaired and participated in the formulation of 21 standards,
varieties and leading industry customers. Deepening supply chain collaborative breakthroughs, with new energy vehicle products
among which it chaired 2 national standards, 3 industry standards, and 2 group standards; and participated in 6 national standards, 3
successfully entering supply chains of leading enterprises such as Chery, BYD, and SAIC; developing a complete series of wind power
industry standards, 2 group standards, and 3 local standards.
steel, with gearbox steel passing certifications from high-end customers such as Envision Energy, DeGeMa, and Nanjing High-Tooth,
achieving stable batch supply; H13 series hot work mold steel covering a wide range of specifications, with rolled materials below
Case??? Leading the Formulation of National Standard GB/T 46214-2025 Hot-Rolled H-Section Steel for Bridge Steel Structures
In August 2025, the National Standard GB/T 46214-2025 Hot-Rolled H-Section Steel for Bridge Steel Structures, led by
the Company, was officially issued. As an important foundational standard in the bridge steel structure field, this standard
precisely connects steel material standards with engineering construction standards, further perfecting China's technical
standard system for bridge steel structures, providing technical basis for structural design units to conduct design
material selection and optimize structural solutions, and strongly promoting the development and innovation of China's
bridge steel structures.
Thick Plate Field In 2025, the Company focused on technological innovation development targets, coordinating the advancement of technical R&D,
achievement transformation, and innovation management work, with scientific and technological innovation activities steadily
Advancing the breakthrough of special plate material domesticization,
progressing according to plan and all annual targets fully achieved. The Company obtained 1 first prize and 1 second prize of the
consolidating leading advantages in energy-use steel industry. Leading
Metallurgical Scientific and Technological Award; 2 Shandong Provincial Science and Technology Awards; 48 Shandong Provincial
the market with 420 MPa high-strength and toughness wind power steel,
Metallurgical Science and Technology Progress Awards, including 13 first prizes; 1 first prize of the Inner Mongolia Autonomous
supporting large-scale crude oil storage projects with Q490RW oil tank steel,
Region Science and Technology Progress Award; and 1 second prize of the Liaoning Provincial Science and Technology Progress
promoting R&D of TMCP-state coal machinery equipment steel, accelerating
Award.
green and low-carbon transformation of traditional energy equipment;
achieving batch supply of ultra-high-strength steel Q890-960; BS450E/
F-XGKY high-toughness wear-resistant steel breaking foreign monopolies,
applied to super mining equipment in the Arctic Circle at -50°C ultra-low temperature environment; freeze-thaw resistant structural
steel for plateau permafrost achieving domestic first launch.
Case??? Full-Specification Nickel-Based Steel Products
The Rizhao Base has successfully achieved batch stable
production of full-specification nickel-based steel products
of various grades such as 9Ni, 7Ni, 5.5Ni, and 5Ni,
achieving a major breakthrough in high-performance steel
manufacturing and application. The products were selected
in the 2025 Top 10 Scientific and Technological Innovation
Achievements of Shandong Province.
The Company has conquered key technologies such
Number Project Name Award Name Award Level Award-Winning Unit (Ranking)
as ultra-pure smelting and thick plate performance
uniformity, building a green and efficient ultra-large width-
Vanadium-Nitrogen Microalloyed Advanced Shandong Provincial Science and Technology Yinshan Profile Steel
to-thickness ratio coil rolling process system. Products
are adapted to ultra-low temperature environments ranging from -101°C to -196°C, with steel plate thickness tolerance Technology and Industrialization Award (1st Position)
controlled within ±0.05mm, with main performance indicators reaching the international leading level, providing core
materials for critical fields such as the energy industry and supporting independent and controllable supply chains in
Ultra-Large Width-to-Thickness Ratio Thin-
the high-end manufacturing field. Rizhao Base
Specification Medium-Heavy Plate Furnace Shandong Provincial Science and Technology
Among these, ultra-thin nickel-based steel developed by the Rizhao Base was successfully applied to the world's largest Coil Rolling Line Core Technology Innovation Award (1st Position)
single-unit liquefied natural gas (LNG) storage tank with a capacity of 270,000 m3 in Zhuhai, Guangdong. Compared with and Industrialization Application
conventional products, the inner wall weight reduction of the storage tank reaches up to 37%, reducing welding on the
tank body, shortening construction cycles, and saving manufacturing costs, achieving a new breakthrough in ultra-low High-Strength Wind Power Steel High-Purity Inner Mongolia Autonomous Region Shandong Steel
temperature material manufacturing and application of medium-thick plate steel products in Shandong Province. 3 Electromagnetic Regulation Key Technology First Prize
Development and Application Scientific and Technological Progress Award (2nd Position)
Innovation Technical Exchange 4
Tundish Ring Outlet Argon Blowing Green Liaoning Province Scientific and Technological
Second Prize
Shandong Steel
Metallurgy Technology R&D and Application Progress Award (3rd Position)
The Company adheres to the philosophy of openness and collaboration, striving to build an "innovation chain – industry chain – supply
chain" integration system. Through integrating resources from all parties, the Company stimulates innovation vitality and promotes
Hot Continuous Rolling High-Strength Steel Grade China Iron and Steel Industry Association Rizhao Base
high-quality industry development. Strengthening synergy and technical cooperation with Baowu, organizing participation in technical 5 Quick Transition and Stable Rolling Intelligent and Chinese Society for Metals Metallurgical First Prize
Optimization Control Technology Development Scientific and Technological Award (1st Position)
exchange meetings on Baowu long-product R&D and industry development collaboration and steelmaking processes organized by
the China Baowu Scientific and Technological Association and Steelmaking Committee. The Company actively hosts and participates
in various industrial technology innovation exchange activities, co-building an innovation ecosystem with universities, research Large-Specification Low-Temperature-
China Iron and Steel Industry Association Shandong Steel
institutes, downstream customers and peers, exploring low-carbon and intelligent transformation pathways, and promoting supply Resistant H-Section Steel for Ships and Marine
Engineering Key Preparation Technology (1st Position)
chain collaborative upgrading and high-quality development. Scientific and Technological Award
Research and Product Development
Indicators and Targets
Looking ahead, the Company will focus on two core directions—decarbonization and intelligent transformation—accelerating
The Company adheres to the philosophy of "high-end-driven, technology-led, "concentrating efforts on building strategic product research and exploration of cutting-edge technologies and their industrialization application, striving to overcome technological
advantages of "section steel, special and superior steel, thick plates, hot rolling, and cold rolling, "comprehensively advancing the bottlenecks in key links, and exploring feasible transformation and upgrade pathways. The Company will continue to actively host
high-end, distinctive, and specialized development of products. The Company persists in the strategy of "low cost for mature products, and deeply participate in various industrial technology innovation exchange activities, further strengthening synergistic collaboration
differentiation for high-end products, and series development for core products," continuously improving the proportion of premium with universities, research institutes, downstream customers, and industry partners, jointly building an open, symbiotic, and vibrant
steel and high-end customers. By the end of 2030, the Company plans to maintain R&D investment at above 5%, possess a batch of innovation ecosystem. By deepening close cooperation and resource integration along the supply chain, promoting coordinated
key technologies and leading products with independent intellectual property rights, achieve an upgrade in product quality and grade, upgrade and value enhancement across the entire chain, and jointly building a safe, efficient, green, and sustainable modern
rank among the first echelon of the domestic steel industry in overall technical level, reach international advanced level in some industrial system, the Company will contribute solid strength to promoting high-quality development of the industry and economic
fields, and strive to become a leader in steel technology. society.
Intelligent Manufacturing Case??? Thick Plate Online and Offline Identification Platform Deployment, Empowering Intelligent Production
The thick plate online and offline identification platform in the
thick plate workshop of the Plate and Strip Plant at the Steel City
The Company actively implements the national digital economy development strategy and the requirements of the "dual carbon"
Base has been successfully put into use in the heat treatment
goals, grasps the trend of intelligent upgrading of the steel industry, takes "AI + Steel" as the core, promotes the deep integration of zone, equipping the production line with "intelligent eyes".
data-driven and intelligent decision-making, builds an intelligent manufacturing system, and drives high-quality development. Relying on 25 sets of high-precision vision systems, the platform
can identify the status of thick plates in real time and send
offset data, solving the problem of errors in traditional manual
Construction of Digital and Intelligent Organizational Framework operation, effectively avoiding the risks of decreased product yield
and equipment damage, realize real-time monitoring of the entire
production process, promote the innovation of production models,
With AI as the technological core and "data-driven + intelligent decision-making" as the pathway, the Company leads intelligent
and significantly improve production line efficiency.
transformation, establishing the "AI + Steel" core strategy, promoting deep integration of AI technology with intelligent operations,
digital operations, and smart decision-making. In 2025, the Company established an AI Digital Intelligence Department, clarifying
functions such as technology origination, data center, and project coordination, while simultaneously formulating the "AI + Steel
Case??? Rizhao Base Awarded the Title of Excellent Smart Factory
Scenario Application Promotion Plan," establishing a solid organizational foundation for transformation.
The Rizhao Base's "Smart Factory for High-Quality Steel
Digital and Intelligent Transformation Strategy and Achievements Plates with Full-Process Integrated Application of Artificial
Intelligence" has been selected as a 2025 Excellent-Level Smart
Factory by the Ministry of Industry and Information Technology.
With "digital and intelligent transformation" as the core strategy, the Company has constructed a systematic intelligent manufacturing The project promotes the in-depth integration of Al and the
promotion system spanning top-level design, organizational change, basic infrastructure, scenario application, to talent cultivation. entire steel manufacturing process, realizes the replacement
During the reporting period, the Company planned 38 scenarios and deployed 20 applications, covering core scenarios such as of manual labor by machines in high-risk positions, and
achieves intelligent control of the whole production process.
iron area management and steelmaking smelting. Among these, the iron smelting centralized control system was selected in the
It has also established a carbon accounting and carbon
intelligent manufacturing solution recommendation directory for the steel industry, reducing coal gas consumption by 5% year-on- footprint management system, practices green and low-carbon
year; the steelmaking mini-AI assistant was locally deployed, alleviating the shortage of high-skill talent and assisting the converter development, and sets an industry benchmark.
end-point carbon-temperature dual-hit rate to exceed 90%.
In January 2025, the Company's independently developed
Molten Steel Smelting Intelligent Control System Based Digital and Intelligent Talent Cultivation
on Data Analysis won the second prize in the intelligent
system software track at the Fourth Shandong Province New
Focusing on digital and intelligent transformation needs, the Company
Material Industry Intelligent Manufacturing Competition cultivates digital and intelligent talent through multiple initiatives.
held by the Shandong Province Department of Industry and The AI Digital Intelligence Department, in collaboration with the Youth
Information Technology and other institutions. Research and League Committee, conducts the "AI + Steel Youth Innovation Toward
Application of Blast Furnace Charging Process Optimization the Future" campaign, organizing 40 teams and 200 young employees
to participate, conducting 6 technical trainings and sharing sessions,
Based on Discrete Element Method won the second prize
covering over 300 person-times, stimulating innovation vitality.
in the provincial intelligent manufacturing competition, and Benchmarking against leading enterprises, the Company organizes
the Company was successfully evaluated as a "provincial business backbone exchange and learning, consolidating information
intelligent manufacturing excellent scenario" and a technology construction foundation. In the system testing phase, nearly
"provincial morning star factory", significantly enhancing the Company's influence in the intelligent manufacturing industry. 100 operation trainings were conducted, achieving full-staff coverage,
improving business operation proficiency. Surrounding the upgrading
of the integration of informatization and industrialization management
Case??? Company's "Shandong Steel Xing Yun" Smart Logistics Platform Launch system, the Company organized AAA-level specialized trainings, comprehensively enhancing employees' digital literacy and
professional capabilities.
In September 2025, the Company's "Shandong Steel Xing Yun" Case??? AI + Steel Innovation Work Type Skills Competition
smart logistics platform was launched, leveraging Internet of
Things and AI technology to achieve full-process visual monitoring, Seizing the "AI + Steel" transformation opportunity, the Company included AI + steel manufacturing scenario design and
intelligent dispatching, and "single-vehicle bidding." The platform application in the first-level work type category of the Company's Sixth Employee Occupational Skills Competition for
constructed a private fleet pool with 3,850 vehicles, stimulating the first time, attracting many young employees to compete. The competition was centered on core content including AI
carrier vitality through innovative settlement mechanisms, application scenario design across the entire steel production process, intelligent equipment operation and optimization,
achieving "heavy going and heavy returning," and reducing empty- etc. Prior to the competition, matching specialized training was conducted, inviting industry experts to explain AI
running rate. First-order transportation cost was reduced by 2%, technology application cases and practical techniques in the steel industry. This competition not only tested employees'
promoting logistics digital and intelligent transformation, helping digital skill levels, but also discovered a batch of young talent with AI application potential, reserving core strength for
the enterprise reduce costs and improve efficiency. enterprise intelligent manufacturing transformation, gaining wide recognition from employees.
Supply Chain Security Supply Chain Risk Management
The Company incorporates supply chain risk management into its enterprise development strategy, aiming to ensure supply chain
As a core support for the sustainable development of an enterprise, Shandong Steel consistently adheres to the supply chain stability, improve supply chain efficiency, and reduce supply chain risks. The Company has formulated documents such as the Notice
management philosophy of "safety and stability, collaborative efficiency, and green low-carbon", deeply integrating ESG requirements on Standardizing Tendering and Public Procurement Review Process Management and the Notice on Raw Material Supplier Online
into the full life-cycle supply chain management. Through establishing a standardized management system, perfecting the full- Management Operation in PLMS, continuously standardizing business processes, and establishing supply chain risk identification,
process control mechanism, and strengthening collaborative empowerment, the Company continuously enhances supply chain evaluation, supervision, and response mechanisms through market research, supplier evaluation, logistics monitoring, digital
resilience and sustainability, building a solid defense for industry chain and supply chain security. platforms, and other means, ensuring the timeliness and effectiveness of risk management, and comprehensively preventing and
controlling supply chain risks.
Supplier Management System
Responsible Mineral Management Supplier Clean and Compliant Procurement Digital Platform
The Company has established a supply chain management organizational system with clear classification and well-defined Practices
responsibility and authority. The Procurement Center provides unified management of bulk raw material procurement, while
equipment and materials procurement is managed through a professional management platform. A Supplier Review Committee has
been established as the highest responsibility decision-making body, composed of procurement center management, responsible
for reviewing and deciding on supplier admission, performance evaluation, and major ESG matters, ensuring the sustainable
development direction of the supply chain from a strategic perspective.
The Company has established a systematic supplier management system, formulating management systems including the
The Company has established The Company works with The Company continuously advances procurement
Raw Material Supplier Management Provisions, Raw Material Supplier Comprehensive Management System On-Site Evaluation
a rigorous supply chain cooperative partners to build digitalization transformation, fully leveraging
Implementation Provisions (Trial), Raw Material Supplier Evaluation Standards, Equipment and Materials Procurement Management
management system ensuring a "sunny and transparent" the centralized procurement scale advantages
Measures, Goods Supplier Performance Evaluation Standards, and Goods Supplier Audit Standards for bulk raw materials and
that all procured raw materials industrial supply chain, of Shandong Iron and Steel Group and Baowu
equipment and materials, standardizing the entire process of supplier admission, audit, evaluation, and tiered management. In the
and components come from organizing the signing of "Clean Group, relying on digital procurement platforms
relevant management measures, the Company explicitly commits not to procure conflict mineral raw materials from conflict-affected
legal and reliable channels. and Integrity Agreements," including the Sunshine Sales and Purchase
and high-risk regions, practicing the commitment of responsible procurement.
The Company commits not to communicating to suppliers M a n a g e m e n t I n fo r m a t i o n P l a t fo r m , R a w
The Company implements procurement management processes covering the entire supplier life cycle, embedding ESG-related use any conflict minerals and the philosophy of upholding Material Procurement Logistics Control System
requirements throughout the entire management process. requires suppliers to commit business ethics and maintaining (PLMS), and Procurement Supply Chain System
that their supplied products do integrity and honest business (PSCS), efficiently coordinating the centralized
not use conflict minerals from practice bottom line. In 2025, procurement of bulk raw fuels, equipment
● S upplier admission must meet basic conditions including legal qualifications, as well as ESG conflict-affected and high-risk the supplier clean and integrity and spare parts, engineering equipment and
Admission requirements such as environment, occupational health and safety, and information security. Through regions. agreement signing rate reached materials, achieving resource sharing, sunshine
and Due admission due diligence, on-site audits, and other methods, the Company conducts preliminary 1 0 0 % , u rg i n g s u p p l i e rs to procurement, cost reduction, and efficiency
Diligence screening and evaluation of potential suppliers. improve quality and participate enhancement, thus improving supply chain service
in clean co-construction. quality and enhancing risk prevention and control
capabilities.
● O n-site audits are conducted for important suppliers, conducting second-party audits based on
standards such as the Raw Material Supplier Comprehensive Management System On-Site Evaluation
Implementation Provisions, forming audit reports. The Company has established a dynamic assessment
On-Site mechanism covering monthly and annual evaluations. Evaluation dimensions not only include traditional Looking ahead, Shandong Steel will target building a more resilient, more responsible, and more competitive supply chain ecosystem,
Audit and performance aspects such as price, quality, delivery, and service, but also innovatively incorporate
continuously deepening the full-life-cycle ESG management of suppliers, perfecting the supplier ESG evaluation and incentive
Evaluation sustainable development indicators such as green and low-carbon. In 2025, a total of 142 suppliers
accepted annual due diligence audits. The rate of suppliers passing the three system certifications of mechanisms; strengthening supply chain risk prevention and control capabilities, continuously deepening clean co-construction
quality management system, environmental management system, and occupational health and safety and collaborative innovation with upstream and downstream enterprises, strengthening data-driven risk early warning capabilities,
management system reached 66.92%. enhancing supply chain rapid response and recovery capabilities, and laying a solid foundation for supply chain security for
sustainable high-quality development.
● Based on comprehensive evaluation results, suppliers are classified into five levels: A, B, C, D and
Grading and E for dynamic management. For suppliers with negative behaviors, measures such as reducing Fair Treatment of Small and Medium-Sized Enterprises
Withdrawal business volume, suspending new business, downgrading and even banning are taken according to the
Mechanisms seriousness of the case, so as to ensure supply chain security. During the reporting period, 42 suppliers Shandong Steel has established a unified e-procurement platform that ensures transparent procurement operations and controlled
were suspended from cooperation due to failure to meet compliance standards, and upon strict review,
processes, while continuously standardizing platform procurement behaviors to comply with standard procedures. Throughout
potential suppliers rejected for non-compliance accounted for 1.88%.
the procurement process, the Company consistently adheres to the principle of honest cooperation in dealing with all types of
suppliers, equally safeguards the participation rights of all SMEs, and creates a fair competitive environment for SMEs to participate
in procurement activities. At the same time, the Company actively responds to the requirements of the Regulations on Ensuring
● The Company emphasizes communication and collaborative capacity building with suppliers. Through
Supplier Payment of Funds to SMEs, promptly and fully pays funds due to SMEs, and effectively protects the legitimate rights and interests of
hosting supplier training meetings, specialized exchange and discussion sessions, and other methods,
Capability the Company promotes its sustainable development philosophy and requirements, shares best practices, SMEs.
Building and jointly enhances the ESG management and technical level of the supply chain.
Product and Service Safety and Quality
In terms of standardization management system, the Company continuously promotes a five-year position standardization initiative,
builds an "8+1+N" standard system, develops more than 4,000 operation cards covering all processes, innovatively applies the
"Four Questions and Four Observations" working method and the SDCA cycle mechanism, and promotes implementation through
the "Thousand-Hundred-Ten" initiative The initiative has earned recognition from Baosteel as a benchmark and strengthened the
foundation of quality.
Shandong Steel has always viewed product quality and safety as the foundation for corporate survival and development. The Company
adheres to the quality philosophy of "quality creates excellence, excellence supports brands, and brands create value," establishes
quality standards aligned with sustainable development goals, implements comprehensive quality control throughout all processes
and across all personnel, continuously improves product quality, continuously cultivates and builds a quality brand matrix, and
Note: The "8+1+N" standard system consists of: 8 core modules defining position responsibilities, 1 operation card
provides customers with high-quality products. standardizing actions, and N single-point lessons addressing specific issues
Quality Management The "Thousand-Hundred-Ten" initiative: optimizing 1,000 operation standards, producing 100 standard videos,
establishing 10 demonstration positions.
Quality Management System
Guided by sustainable development, the Company integrates excellent quality into its core strategy and builds a quality governance Quality Risk Control and Management
structure with clear responsibilities and a top-down approach. The quality management system centers on three major dimensions—
"strategic coordination, customer focus, and data loop closure"—and is highly aligned with the "green intelligence and lean Based on quality "consistency" management, the Company builds a quality risk control and management system for the entire
operations" strategy and the requirements of "integration of two systems" (informationization and industrialization). In 2025, based on product lifecycle. Through systematic identification, assessment, and response, it effectively prevents and controls product quality and
IATF 16949 and GB/T 19001 (ISO 9001) standards, the Company developed, revised, and published the Quality Management Manual, safety risks. During the reporting period, the Company did not experience any major product quality and safety accidents.
which systematically clarifies quality policies, objectives, and responsibilities at all levels, and strengthens quality control across all
Product Quality Risk Identification and Assessment
personnel and processes.
The Company strictly complies with laws and regulations such as the Product Quality Law of the People's Republic of China and The Company systematically identifies risks across the entire process from product design and development, raw material
benchmarks against international advanced standards. Products have obtained certifications from the EU PED, CPR, Japanese procurement, production and manufacturing, to delivery and after-sales. For technical challenges, it conducts specialized
JIS, Korean KS, and nine national classification societies. Since 2007, the Steel City Base laboratory has maintained continuous identification, and the technical team performs specialized assessment and response to major risks. Through "daily tracking, weekly
accreditation under CNAS (ISO/IEC 17025), and its test results have international mutual recognition validity, providing solid support adjustments, and monthly optimization", it continuously monitors production volatility risks, forms quality problem lists and problem-
solving projects, establishes special problem-solving groups, and advances the optimization of process parameters, technical
for product quality.
modifications, and the strengthening of standardized operations.
Product Design and Development Quality Improvement
The Company adheres to innovation-driven development, focuses on the high-end, premium, and differentiated route, and
incorporates requirements for high performance, high reliability, and environmental protection into product development. It
improves product quality through process innovation and process optimization, and all new products undergo strict trial production
Q960E High-Strength Structural Heat-Treated Steel Plate obtained the "Taishan Quality" certification and inspection to ensure that performance meets standards. The Rizhao Base has revised the "New Trial Product Development
Large-Diameter Long-Distance Oil and Gas Transportation High-Strength and High-Toughness Management Method" to further standardize the product development process.
Pipeline Steel Hot-Rolled Coil Plate was selected as "Shandong Manufacturing Luchain Premium
Process Quality Supervision and Audit
Products"
The Company establishes an internal audit and management review improvement mechanism and implements a
Internal "quality gate" management model. Through auditing to identify problems, closed-loop rectification, and standard
Audit and optimization, it achieves continuous quality improvement. In 2025, the Company conducted joint internal audits
Continuous
Improvement with Baowu Group for the first time, promoted closed-loop problem management by formulating rectification
schedules, and simultaneously conducted weekly inspections of the systems of each unit, integrating auditing
Offshore Engineering Steel Products Obtain Nine National Classification Societies' Certification and Are Applied to
Case?? Global Equipment into daily management to improve quality management levels.
The EH460Z35 ship plate and offshore engineering steel
developed by the Company passed the joint certification Supply Chain The Company implements a strict supplier admission evaluation process, constructs a linkage model through
Quality
from nine national classification societies in one go, Management "coke-iron integrated management reform" to control raw and fuel material quality from the source, and
ensures the overall quality level of the supply chain.
achieving complete coverage of shipbuilding and offshore
engineering steel plates in the series with a yield
strength of 690 MPa and below. This product provides
material solutions for shipbuilding and marine equipment
Quality The Company advances quality digitalization and intelligent transformation, implementing real-time monitoring
manufacturing enterprises and has won high recognition Digitalization and automatic adjustment of key process parameters and in-depth analysis of quality data through technological
from customers. Construction
means such as quality design informatization platforms and intelligent control platforms.
Case??? Developing Quality Design Informatization Platform to Improve Quality Planning and Control Capabilities Customer Responsibility
Leveraging the newly established manufacturing Guided by customer value, Shandong Steel optimizes its service system, precisely identifies customer needs, upgrades service
management system, the Company developed experience, and builds a mutually beneficial and win-win cooperation ecosystem. The Company steadily advances its transformation
a quality design informatization platform that toward becoming a "comprehensive solution service provider," achieving symbiosis, co-prosperity, and coordinated development with
enables precise customer standard identification, customers.
scientific establishment of process standards, and
other capabilities, advancing quality design toward
Customer Service System
informatization, process-based management,
and standardization. In 2025, the quality design The Company adheres to a customer-centric approach, systematically optimizes its customer service system, and has revised
informatization platform was applied to five major
product series—section steel, thick plate, special and
Quantity Dispute Management Method to strengthen the foundation of service management. Leveraging the "three-in-one"
superior steel, rebar steel, and commodity billet—with
synergy mechanism of marketing, production, and research and development, it continuously builds a cooperation model of "one
a total of 1,881 new metallurgical standards added, covering the entire process from hot metal pretreatment to product
release for shipment. This significantly enhanced quality planning and control capabilities. agreement, one list, one center". It comprehensively implements a large-account manager system, focusing on "Five-Heart Service"
commitments, and builds an end-to-end, full-lifecycle customer service system covering joint research and development, customized
production, quality collaboration, rapid dispute response, and supply chain optimization. This effectively supports strategic customers
in achieving import substitution, cost reduction and efficiency improvement, and product upgrades, while co-building a safe, efficient,
Product Traceability and Recall Mechanism and sustainable iron and steel industry ecosystem.
Adhering to the "customer-centric" philosophy, the Company establishes a comprehensive product monitoring and customer feedback
closed-loop management process, and formulates clear product recall procedures and contingency plans. Through systems such
as the "Quality Problem Assessment Rules" and "Quality Accident Management Standards," it ensures effective system operation. Trinity Collaborative Mechanism of Collaboration Cooperation
Through routine quality inspections and market problem reviews, the Company continuously enhances process control capabilities. Mechanism "One Agreement, One List, One Center"
Marketing, Production and R&D Model
Quality Culture Development
The Company consistently adheres to the core concept of "quality is the lifeline of the enterprise," anchors to quality management
system standards such as IATF 16949, builds a multi-level and comprehensive quality culture development system, promotes all Case??? "Five-Heart Service" Empowers Cooperation and Promotes Green and Intelligent Development
personnel to transition from "passive acceptance of inspection" to "active prevention of defects," and empowers the Company's core
competitiveness through quality.
The Company strengthens the foundation of quality through routine training. In 2025, it conducted 21 quality management- In 2025, the Company held a strategic user conference and deepened strategic cooperation with the "Five-Heart
related training programs with content covering system standards, quality tools, and position-specific skills, implemented on a Service". With its precision manufacturing capabilities, the Company controlled the tolerance of cold-rolled coil to
functional and hierarchical basis. It focuses on organizing specialized training for internal auditors and external "Six Quality Tools" 0.01mm and achieved a 23% weight reduction of high-strength steel for new energy vehicles, meeting the precision
training, continuously strengthening the construction of a professional talent pool. At the same time, it systematically promotes
and lightweight requirements of high-end manufacturing; implemented a regional supply assurance model to shorten
the implementation of Six Sigma projects and develops employees' data-driven improvement capabilities through methods such as
DMAIC. In terms of mechanism guarantees, the Company continuously improves its quality assessment and incentive system, refines customers' inventory cycles; organized a joint technical team to reduce customers' comprehensive costs and shorten
departmental and position-specific quality indicators, and strengthens positive guidance. Through the coordination of systems, the R&D cycle; established a technical support mechanism and assigned exclusive customer managers to respond
processes, and culture, it effectively promotes employees to develop conscious behaviors of "operating according to standards, actively to customers' technical consulting and after-sales needs. During the strategic user conference, the Company signed
reporting, and actively participating in improvements," achieving a deep-level transformation of quality culture from ideological long-term cooperation agreements with many customers to jointly promote the application of green low-carbon and
advocacy to behavioral habits.
intelligent manufacturing technologies.
Case??? "Quality Month" Multi-Dimensional Empowerment for Quality Improvement
In 2025, the Company launched the "Quality Month" special
initiative with the theme of "Deepening Quality to Strengthen
Foundations and Casting Premium Products". The initiative
disseminated the "customer-centric" philosophy through
multiple channels, conducted standardized "fault-finding"
work and collected 1,347 improvement suggestions; practiced
the "downstream is customers" philosophy and completed 28
cross-process mutual visits and visits to 37 external customers.
At the same time, it organized activities such as knowledge
competitions and case sharing to promote the visual and
narrative dissemination of quality concepts, and fostered a strong organizational atmosphere of "everyone values quality
and everyone creates quality".
Customer Experience and Feedback Standardizing Customer Feedback
The Company focuses on optimizing customer experience, standardizing feedback, and addressing complaints, advancing services The Company deepens the implementation of the "Customer Satisfaction
from passive response to proactive solutions, and continuously improving customer satisfaction and loyalty. Engineering" and "Four Advantages One Strategy" classification service
and establishes a rapid response channel for quality disputes. In customer In 2025, the composite score of customer
Optimizing Customer Experience satisfaction management, it conducts assessments using stratified quota
sampling methods and precisely captures customer needs around five core
satisfaction evaluation reached 90.1,
dimensions: brand image, market promotion effectiveness, product quality,
service experience, and customer requirements. In 2025, the customer
The Company builds a three-level service mechanism of senior management mutual visits, The resolution rate of quality objection complaints
satisfaction assessment achieved a comprehensive score of 90.1 points.
High-Efficiency
Service Response
technical service, and account manager tracking. It assigns dedicated large-account managers
to strategic priority customers, launches multi-channel coordinated rapid response processes,
In the area of feedback closed-loop management, the Company establishes
and improves its customer feedback closed-loop management mechanism,
stood at 100% .
optimizes production through spare inventory, schedules logistics scientifically, prioritizes standardizes complaint handling procedures and response time standards,
delivery lists, and ensures on-time delivery. and formulates specialized disposal procedures for product quality disputes
with clear professional departmental responsibility allocation and coordination
mechanisms. It achieves a 100% resolution rate for quality dispute complaints, effectively protecting customer rights and interests.
Deploying the "IEC-S Smart Innovation" client and mobile APP enables end-to-end
independent operations including order submission, fund matching, delivery tracking, and Case??? Strengthening Customer Response and Enhancing Service Quality
Service Process dispute submission. This shifts information acquisition from passive waiting to proactive
Intelligentization
engagement. The system features a user-friendly interface and simple operation, effectively
In December 2025, the Company held a special meeting on the
addressing the pain points of lengthy manual inquiry processes and information opacity.
operation of the customer satisfaction management system,
focusing on customer needs and feedback governance, and
clarifying the construction goals of the full-process customer
The Company forms production-sales-research integrated teams to go deep into customer satisfaction management system. It deployed work around
sites and carry out diverse services such as specialized training. Using precise service improving service capabilities, strengthening collaborative
Service Interface
Precision interface as a lever, it strongly promotes the strategic transformation from product orientation linkage, and promoting closed-loop problem solving, tested the
to customer value orientation and realizes the comprehensive upgrade of the service model. effectiveness of the system operation through special tests, and
continuously optimized customer services to improve customer
satisfaction and comprehensive service value.
Case??? Section Steel "Spot Supermarket" Mode Innovation Empowers Service Upgrade Customer Rights Protection and Compliant Marketing
Positioning itself as the preferred comprehensive solution service Shandong Steel adheres to the principles of compliant operations, honest service, and responsible marketing. It deeply integrates
provider for section steel, the Company focuses on customers within compliance requirements into the entire product promotion and service process. It standardizes product labeling, instructions, and
March 2025, the first order of "section steel spot supermarket" delivered promotes sustainable development of marketing business. During the reporting period, the Company experienced no customer data
Qingdao achieved full-process one-stop distribution, and Jining jointly In 2025, the Company systematically conducted compliance training and organized 31 activities and specialized training sessions,
established a research institute with over 10 high-end products under strengthening compliance capabilities through multi-form practical training and closed-loop management. During the reporting
development, collaboration volume breaking 10,000 tonnes, achieving period, a cumulative total of 5,638 people participated in training with a total duration of 53,480 hours, strengthening the foundation
win-win results through speed and quality. for compliant operations.
Case??? Deepening Technical Collaboration and Co-Cultivating Rich Annual Results
In May 2025, the food-grade premium tin plate joint laboratory co-built by
the Rizhao Base and Yulan was unveiled. The laboratory centers on technical
collaboration, focuses on product research and development, quality, and
process optimization, and serves as an innovation engine spanning the entire
chain from "material research and development-manufacturing-application."
Data Security and Privacy Protection Technology Protection System Upgrade
In 2025, the Company comprehensively upgraded its security technology system. It deployed the scalable
detection and response platform XDR above the security situation awareness platform to enhance threat
Following the principle of "equal emphasis on security and development," Shandong Steel builds a safety protection system covering detection and response capabilities; built a network security supervision platform to achieve centralized
Technology monitoring of subsidiary security events; optimized wide area network firewall policies, strengthened access
the entire data lifecycle and achieves strategic transformation from passive defense to proactive governance. Through optimizing
Protection permission management, and implemented virus scanning, intrusion prevention and other protective measures
organizational structure, improving system standards, and advancing technology system construction, it forms a systematic for boundary traffic.
information security governance landscape.
Network Security Protection Upgrade
Data Governance System Construction
The Company optimizes firewall policies, strengthens access permission management, and implements virus
scanning and intrusion prevention for external traffic. At the same time, through specialized risk assessments,
The Company uses systematic construction as a lever to advance data governance and information security management, it identified issues such as low antivirus software coverage and promoted time-limited remediation, raising the
strengthening the foundation for digital transformation. In 2025, it established the new AI and Data Intelligence Department, Network antivirus installation rate to 95%. Through system hardening and governance, the Company's network security
Security
responsible for data and model governance system construction and the overall management of network and information system protection capabilities have been significantly enhanced.
security. Simultaneously, it improved the implementation of the information security organizational management system, built a
three-level architecture from the decision-making to management to execution levels, clarified responsibilities at each level, and
formed a coordinated and efficient data security management mechanism. Emergency Response Capability Development
The Company adopts a "pilot-rollout" approach to implement the data governance system. The Rizhao Base and Shanxin Software In 2025, the Company developed new information security incident emergency response plans that match
were the first to establish comprehensive data governance systems. The Steel City Base published the "Big Data System Construction actual working conditions, clarified personnel allocation and disposal procedures, and organized emergency
and Data Governance Management Method," building a systematic and standardized support framework that enables data drills for "Trojan Infection Leading to Phishing Information Dissemination Event Response," covering three
management to follow procedures and be evidence-based. Emergency relevant departments. These drills tested the scientific validity and feasibility of emergency plans, enhanced
Response cross-departmental coordination capabilities, and established standardized response procedures.
In January 2025, the Company issued the "Network Security Management Measures" to refine business processes. In accordance
with the "Data Security Law of the People's Republic of China, " the "Personal Information Protection Law of the People's Republic
of China" and other laws and regulations, the Company established a cross-departmental compliance working group to carry out Network and Information Security Training
regular data risk assessment and compliance audit.
The Company upgraded its information security training system, added risk management and decision security
training for management levels, and strengthened specialized practical training courses for technical positions.
It conducted company-wide information security knowledge popularization, focusing on improving technical
personnel's professional capabilities such as vulnerability mining and emergency response. Through simulated
Case??? Shanxin Software Data Governance Practice phishing attack drills, it enhanced employees' risk identification and response capabilities, strengthening
Network and
Information the foundation of security protection. In 2025, the Company organized 3 relevant training sessions, with the
As a pioneer in the Company's data governance, Shanxin Software has passed DCMM Level 2 certification, and obtained Security employee information security training coverage rate reaching 100%, comprehensively improving all employees'
the Information Security Management System Certification ISO/IEC 27001:2022 and the Information Technology Service awareness and capabilities of data security protection.
Management System Certification ISO/IEC 20000-1:2018. It has established a standardized data classification and
grading management mechanism, realizing full-lifecycle traceability of core data, providing replicable and promotable
practical experience for the Company's data governance, and has been successfully selected into the list of key
enterprises for network and data security in Shandong Province and the list of technical support units for network and Case??? The Company Strengthens Confidentiality Education and Builds a Solid Security Defense Line
data security in Jinan City.
In May 2025, the Rizhao Base organized relevant
p e rs o n n e l to co n d u c t t ra i n i n g a t t h e R i z h a o
Confidentiality Education and Training Platform.
Trainees studied the important guiding spirits of
confidentiality work, watched warning education
videos, intuitively understood the leakage risks
of common equipment, strengthened political
responsibilities and risk awareness, improved the
confidentiality capabilities of all staff, and consolidated the defense line of compliant governance and information security.
Network and Information Security Risk Prevention Privacy Protection
The Company strictly complies with laws and regulations including the "Law of the People's Republic of China on the Protection
The Company constructs a comprehensive risk prevention system through technology upgrade, risk assessment and remediation, of Personal Information" and formulates comprehensive "Network Security Management Methods." It adheres to the principles of
emergency plan development and drills, effectively enhances security protection capabilities, and safeguards network and information legality, justification, and necessity, and protects personal information throughout its entire lifecycle through strict technological and
security. administrative measures such as encryption and access control. It safeguards user information-related rights and establishes an
During the reporting period, the Company had no information security leakage incidents throughout the year. emergency mechanism for security incidents. During the reporting period, the system operated continuously and effectively with no
major personal information security incidents.
Employees Impact, Risk and Opportunity Management
The Company establishes a routine risk and opportunity identification mechanism and regularly assesses potential challenges
and opportunities in employee management, employee development, and organizational change. It formulates scientific response
Shandong Steel upholds the philosophy that "talent is the first resource and talent advantage is the core advantage of the enterprise",
strategies and strengthens the talent foundation for high-quality enterprise development.
regarding employees as the company's most valuable asset. The Company focuses on talent team building, optimizes recruitment,
development, promotion, and care across all links, and achieves co-creation of value and win-win growth between employees and the
enterprise. Identification Area Risk Opportunity Response Measures
Leveraging industrial upgrade
Governance and intelligent manufacturing
Strengthen ideological guidance and
protect employee rights. Deepen the
During industry restructuring and transformation, continuously
"Wanxiang Gengxin" compensation
The Company has established a cross-departmental talent management coordination mechanism of "CCP committee leadership, HR- enterprise transformation and improve the talent developm-
reform, strengthen performance
upgrading, the stage-by-stage ent system, revitalize internal
led direction, union guarantee, and league committee coordination". The Human Resources Department comprehensively oversees orientation, and implement pay-for-
mismatch between employee positions, enhance skill
human resource strategy planning, recruitment and allocation, compensation and benefits, employee training and development, Human Resources performance. Build a three-level talent
skill adaptation, dynamic training, and build career
and Employee Stability pool of "core-backbone-potential,"
performance management, and labor relations. To ensure the effective implementation of policies and comprehensive protection of position. adjustment, and career p a t h s to e n s u re sta b le
implement dynamic management and
employee rights, each subsidiary company under the Company is equipped with professional human resources specialists, forming a development expectations impacts employment and growth for
precise development. Establish platforms
standardized and professional human resource management network covering the entire company. At the same time, the Company's team stability and organizational employees, strengthening
such as labor competitions and company-
effectiveness organizational cohesion and
Board of Directors has established a Budget, Compensation and Assessment Committee to guide and supervise the standardized wide position innovation to provide growth
sustainable development
operation of the Company's compensation system and ensure the scientificity and impartiality of key decisions such as compensation opportunities for skilled talent
capability
incentives.
Cross-departmental Linkage Mechanism Employee Rights
Compliant Employment and Diversity
Human League The Company strictly complies with the "Labor Law of the People's Republic of
Party Committee Trade union
resources-led committee China" and other laws and regulations. It builds a sound and closed-loop labor
leadership support In 2025
implementation coordination contract management system, focusing on three dimensions: anti-discrimination
and diversity, child labor prevention, and forced labor prevention. It adheres to the the Company's labor contract signing
principle of "fairness, justice, and inclusive diversity," strictly prohibits any form
of employment discrimination, forced labor, and workplace harassment, firmly
eliminates child labor, standardizes recruitment control procedures, selects and
rate reached 100%
employs outstanding college graduates, implements employment support policies
Strategy for discharged military personnel, and optimizes flexible introduction of external with no major labor disputes.
experts. It truly guarantees equal employment rights for all groups of people and
Adhering to the principle of "talent first", the Company focuses on building a high-level talent hub in the steel mainstream business, aligns with the core requirement of industrial reform to "strengthen the workforce
deepens human resource system reform, and works to cultivate and develop a workforce with an optimized structure, reasonable and ensure fair employment."
distribution, and excellent quality. Through deepening the "Wanxiang Gengxin" compensation reform, building a market-oriented
compensation distribution system, strengthening talent recruitment, systematic development, and value-oriented performance Talent Recruitment
evaluation, the Company fully activates human resources and improves organizational effectiveness.
In 2025, the Company revised the "Employee Performance Management Method," "Position Salary System Implementation Rules," Anchoring to the goal of building a high-level talent hub in the steel mainstream business, the Company establishes a management
"Position Annual Salary System Implementation Rules," "External Expert Recruitment Management Method," "Human Resource system of "precise talent recruitment, systematic talent development, scientific talent utilization, and ecological talent retention." It
Allocation Management Method," "External Recruitment Management Method," and "Staffing Management Method," while establishes a talent pipeline and dynamic talent pool to ensure that talent reserves precisely match strategic development. Focusing
simultaneously optimizing eight work systems including the "Employee Position Innovation Management Method" and "Union Fund
on "high-tech, cutting-edge, and scarce" areas such as production processes and technology, it widens talent recruitment channels,
Revenue and Expenditure Management Method." These comprehensively cover recruitment, compensation and benefits, performance
improves flexible talent recruitment mechanisms, recruits key talents to solve technical and process difficulties, and supports key
management, position innovation, and union operations, ensuring that the systems are highly aligned with the "Labor Law of the
People's Republic of China" and the "Labor Contract Law of the People's Republic of China," with a 100% annual system compliance team building with specialized incentive plans to enhance the Company's core competitiveness through talent effectiveness.
execution rate. In 2025, the Company recruited a total of 16 new employees, including 10 college graduates. The Company actively fulfilled its social
responsibility by accepting and placing 6 discharged military personnel.
Revision of Systems Covered Fields Compliance Rate Legal Disputes The Company has optimized and improved its compensation system, and revised performance management and compensation
Completion of Revision of Recruitment, Compensation, System Implementation Major Labor Dispute systems including the "Employee Performance Management Measures, ""Implementation Rules for the Post Salary System, " and
Core Personnel Systems Performance Management, Compliance Rate Cases "Implementation Rules for the Post Annual Salary System, " implementing the requirement of "safeguarding labor and economic
etc. rights and interests" in the reform of the industrial worker team construction throughout the whole process. Adhering to the principle
of "grading by post, setting salary by grade, matching people with posts, and adjusting salary with post change, " the Company breaks
the restrictions of fixed ranks, establishes a salary promotion system for employees with vertical promotion and horizontal grade
advancement, and forms a dynamic adjustment mechanism in which employees' salary levels increase with value contribution and
career development, truly achieving steady growth in employees' income. Upholding Core training programs are conducted through classified and tiered
the principle of "value creation and value sharing, " performance-based compensation approaches. The first-line operations focus on skill-level evaluation
is tilted preferentially to profit-creating units and high-tech and skilled talents, further In 2025 training in core processes such as steelmaking, rolling, and ironmaking, In 2025
stimulating employees' enthusiasm for innovation and creation. with over 600 participants and cultivation of 252 senior workers,
In terms of welfare, the Company has been continuously improving its security level t h e e m p loye e s o c i a l i n s u ra n ce technicians, and above. Eight-phase equipment inspection personnel Total Training Hours: 4.1391 Million
and service convenience. In 2025, the Company optimized supplementary medical
insurance coverage items and service procedures, and implemented the " Four-
coverage rate reached 100% capability enhancement training was conducted, inviting experts for
theoretical and practical teaching, covering 552 inspection personnel at
Hours
Season Care" inclusive services to effectively enhance employees' sense of gain in
all levels. In the management technology area, it held young and middle-
compensation and welfare. In 2025, the employee social insurance coverage rate the average annual paid leave days aged backbone training classes and middle management leadership Employee Training Coverage: 100%
reached 100%, and the average annual paid leave days per employee were 9.6 days.
per employee were days development seminars, covering 45 young backbones and 43 middle
Meanwhile, the Company promoted the upgrading of "three rooms, one hall and one
station, " improved various living facilities in the plant area, upgraded the intelligent managers respectively, strengthening change awareness and leadership
bathroom system, and optimized the working and living environment for employees. It capabilities.
also established an urgent affairs handling mechanism to quickly respond to employees' demands, effectively enhancing employees' Deepening the reform of industrial workforce development and building a
sense of belonging and happiness. high-quality workforce. Maintaining typical leadership and demonstration
We will deepen the reform of the industrial
effects, the Company actively cultivates and selects advanced models and
high-skilled talent. In 2025, the Company commended 20 labor models worker team development and build a high-
and 30 excellent employees at this level; 18 people received group-level quality workforce.
"Shandong Steel Labor Model" and "Shandong Steel Craftsman" titles;
Grade based Person-position Create value
first batch high-level talent support plan; Zhao Shilong received the "Qilu
on position matching Share value commended at the
Master Craftsman" title, Yu Hui received the "Qilu Craftsman" title, Liu
Wenping received the "Qilu Most Beautiful Worker" title; Li Zigao received company level
the "Great Country Craftsman" talent title, achieving Shandong Steel's
Salary based Salary adjustment with
"zero breakthrough" in this honor. The Company received Shandong 18 individuals awa- 34 employees selected
Province's "May 1st Labor Award." It held a high-skilled talent team rded group-level model for the echelon developm-
on grade position change
building promotion conference and continuously fostered a strong worker and master ent program
atmosphere of "respecting labor, advocating skills, and striving to be craftsman titles
advanced."
Democratic Management and Communication
Continuously promoting company-wide position innovation, focusing
The Company improves its democratic management system, achieves full coverage of grassroots employee representative on key indicators such as employee participation rates and average number of outstanding results per person. Through improved
conferences (ERCs), and uses ERCs and delegation leader liaison meetings to deliberate and vote on major matters, ensuring process management and achievement incentive mechanisms, employees cumulatively implemented and completed 28,700 projects
employees' information access, participation, expression, and supervision rights. It truly implements the core requirement of throughout the year. It organized annual excellent project and advanced individual selections, held an all-staff position innovation
industrial workforce development reform to "guarantee the master status". It builds a diversified two-way communication mechanism, commendation ceremony, and carried out activities to present awards at positions, commending 145 excellent projects and 8
forming a closed-loop management model. To date, it has implemented 79 employee representative proposals, responded to and
innovation pioneers. It held an all-staff position innovation competition, organized themed seminars, implemented 12 key problem-
handled over 160 suggestions and comments, with response rates and satisfaction rates both reaching 100%.
solving topics, and commended 12 excellent innovation teams.
It innovatively held "Speak Out, Express Ideas, and Promote Development" democratic symposiums, providing on-site responses to 13
issues and written replies to 7 issues. It established a "submit suggestions with one click" opinion collection network and, combined
with quarterly surveys, formed full-process closed-loop management, substantially enhancing employee sense of achievement and
happiness.
Career Development
Promotion and Development
Breaking through traditional hierarchical barriers, the Company establishes a career development mechanism with vertical
integration and horizontal linkage. Employees can develop vertically along one sequence or horizontally transfer between different
sequences based on work needs, position characteristics, and their own strengths. It integrates industrial workforce development
reform "career development" requirements into the promotion system, establishing a three-channel promotion mechanism of
management, technical business, and operations maintenance for industrial workers. It promotes job rotation for key positions and
training positions for excellent personnel, broadening talent development pathways; through channels such as ERCs and democratic
symposiums, it protects employee rights, strengthens team stability foundation, and aligns with compliance and governance
requirements.
Employee Development
In line with the principle of "on-demand, classified and phased, "the Company has coordinated and planned the annual employee
training plan and built a training system covering all employees and running through their career. Focusing on key positions and
core competencies, the Company has carried out precise and systematic training programs. In 2025, the total annual training hours
of employees reached 4.1391 million, with 100% employee training coverage, 100% professional skill training coverage and 100%
leadership training coverage.
Strengthening skill competition empowerment. The Company held the second employee professional skill competition and youth
Case??? National Tug-of-War Championship Victory and Culture, Sports Festival Empowerment
technical competition, and the Rizhao Base held the sixth employee professional skill competition, promoting new skill improvement
for employees. In the metallurgical industry group leader comprehensive skill competition held by the Shandong Federation of
Trade Unions, the Company won a group second prize with 7 people receiving individual awards. A series of competitions effectively In November 2025, the Company fielded a team for the 2025 National Tug-of-War Championship and, through solid
stimulated employees' enthusiasm for learning skills and practicing capabilities, cultivated a large number of skilled talents for the training and perfect teamwork, achieved a historic best result of 2 gold and 1 silver medals. This not only demonstrated
Company, and formed a craftsman talent pipeline with clear levels and excellent business competence. the tenacious and hard-working spirit of Shandong Steel employees, but also used cultural and sports activities as a
bridge to unite the strong synergy of company-wide collaborative advancement.
Case??? Rizhao Base Holds Sixth Employee Professional Skill Competition
In July 2025, the Rizhao Base successfully held the sixth
employee professional skill competition. The competition featured
design applications, with over 2,600 employees participating
and 125 people commended for being technical leaders and
technical experts. Through pre-competition training and position-
specific drills, the event used competition to promote learning,
training, and advancement, providing a platform for employee
skill improvement, comprehensively strengthening employee
competency and job performance capabilities, and laying a solid
talent foundation for enterprise high-quality development.
Company Holds High-Skilled Talent Team Development Promotion Conference and Second
Case?? Employee Professional Skill Competition Summary and Commendation Conference Highlights of Cultural and Sports Activities
In November 2025, the Company held a high-skilled talent
team development promotion conference and second employee
professional skill competition summary and commendation
conference. The meeting focused on talent development,
craftsman spirit cultivation, and skill competition empowerment,
commending excellent skilled talent and deploying talent building
work.
This employee professional skill competition and youth technical
competition featured 21 job categories, divided into preliminary
and final stages, with over 6,000 employee participations. A total of
Through competition-driven learning and talent development,
it laid a solid talent foundation for enterprise high-quality
development.
The First "Baolan Good Voice" Youth Singer Competition The First Series of Activities of the Staff Culture
and Sports Festival
Employee Well-being and Care
Deepening the construction of a happy and harmonious enterprise, the Company practices the philosophy of "sitting on the same
bench with employees" and uses "doing practical things for employees" as a lever. Through thematic research, it identified 51
practical matters, of which the Company prioritizes 10 and departments implement 41, all completed by the end of the year. Shift
optimization, comprehensive health checkups, charging pile construction and other matters received widespread employee approval,
substantially enhancing employees' sense of achievement and belonging. The Company established a "six-line guarantee" precision
assistance system covering specialized assistance, routine relief, mutual assistance, and supplementary medical dimensions, with a
total of over 310,000 yuan in relief funds distributed throughout the year, achieving comprehensive benefit coverage.
Strengthening precise care and cultural empowerment, the Company regularly conducted "Four-Season Delivery" activities,
distributing cooling supplies benefiting 9,000 employee visits; organized 319 first-line employees and labor models/craftsmen to
participate in recuperation and rest programs; enriched cultural and recreational activities by holding the first employee culture and
sports festival series activities, organizing 8 mass sports competitions such as group walks with over 4,500 employee participations. 2025 Culture, Sports and Arts Festival Opening Ceremony and Employee Healthy Walking Activity On-Site
The Company held employee children "Innocent Wisdom, Empowered Growth" practical activities and the first "Baolan Good Mini-Marathon Employee Healthy Walking Activity
Voice" youth singer competition, balancing employee and children needs and enriching employee leisure time; cultural and sports
associations and grassroots units conducted over 200 team-building activities, fostering a harmonious and uplifting cultural
atmosphere.
Occupational Health and Safety
Focusing on the needs of female employees, young employees,
and other groups, the Company implemented "twice-yearly
screening for two cancers" for female employees, completing
quality education and position competition activities, with year action plan for safety production "fundamental remediation", perfecting the occupational health and safety management system,
Fragrant March 8" excellent organizational units, and 1 female development, and wholeheartedly protecting the health and safety of employees and stakeholders.
employee receiving the "Qilu Most Beautiful Worker" title. For
young employees, it provided growth and socializing platforms, Governance
held "Fate on Qixi·Steel is Good with You" social activities, and
organized 5 outdoor team-building sessions covering over 300 The Company has established the Work Safety Committee as its highest decision-making and deliberative body, with six specialized
people, effectively protecting the rights and interests of all Company Held Celebration of Women's work safety committees underneath. The Safety and Security Department implements safety management functions; production units
groups. Day Commendation Conference at all levels implement localized safe production responsibility systems. Through promoting "one position one checklist, one position
one assessment" and cause-tracing investigation mechanisms, the Company strengthens full-staff safety responsibility and solidifies
the foundation of safety management.
Metrics and Targets
In 2025, through implementing a precise talent development mechanism, building a value-oriented assessment and distribution Security Department
mechanism, and a company-wide innovation mechanism, the Company achieved significant results in talent team building, providing
a solid talent guarantee for sustainable development. Notably, professional skill-level evaluations were conducted for at least 300
employees, and at least 5 people were independently cultivated and selected for national and provincial talent programs.
Steel City Base Rizhao Base
Indicator Unit 2025
Total Employee Count Person 18,844
Special Equipment Inspection
Fire and Rescue Brigade
Fire Control Management Office
Male Employee Count Person 16,670
Safety Management Office
Safety Supervision Office
Safety Technology Office
Public Security Office
General Safety Office
Safety Supervision Office
Fire Technology Office
Armed Security Office
Female Employee Count Person 2,174
Station
Female Employees in Management Positions Person 30
Employees Aged 30 and Below Person 2,070
Employees Aged 30-50 Person 10,790
Employees Aged 50 and Above Person 5,984
Employee Turnover Rate % 0.6 The Company implements a tiered inspection mechanism that links supervisory performance with the "Safe Production Performance
Assessment Responsibility Statement," dynamically coordinating the annual safety reward assessment in accordance with the "Safe
Male Employee Attrition Rate % 0.57 Production Supervision and Management Measures." This effectively clarifies hierarchical responsibilities, addresses performance
gaps, and enhances managers' occupational health and safety competency.
Female Employee Attrition Rate % 0.03
Strategy
Employee Work-Related Injury Insurance Coverage Rate % 100
The Company integrates occupational health and safe production targets deeply into its overall development strategy, which is
Labor Contract Signing Rate % 100 reviewed and approved by the Work Safety Committee. Upon approval, these targets are transformed into concrete implementation
plans with corresponding resources allocated to ensure their achievement. The Safety and Security Department continuously
Proportion of Employees Receiving Regular Performance and Career
% 100 improves the safety management system through regular monitoring, periodic assessment, and dynamic optimization, effectively
Development Evaluations
addressing risk challenges and supporting the Company's sustainable high-quality development.
Occupational Health and Safety Management System
Looking ahead, the Company will continue to deepen cadre and talent team building, establish a scientific cadre pipeline, and
continuously inject vitality into high-quality development. The Company will comprehensively advance improvement of human resource The Company firmly establishes the philosophy of "life first, safety-oriented development," rigorously implements occupational
efficiency, improve talent development and growth mechanisms, and continue to do well in employee welfare and rights protection health and safety laws and regulations, actively advances the three-year action plan for safety production "fundamental remediation,"
work, mobilizing the tremendous force that drives the enterprise forward. comprehensively deepens the full-staff safe production responsibility system, strengthens "one person with dual responsibilities"
and "three management three must-dos," and continuously perfects the dual-prevention mechanism of safety risk classification
management and hidden hazard investigation and treatment.
In 2025, while maintaining the effective operation of the ISO 45001/OHSMS occupational health and safety management system, the Fire Prevention and Emergency Management
Company completed the revision of 41 safety management systems and improved the performance evaluation methods for various
production units, achieving precise alignment between safety regulations, laws and actual risks. In accordance with the "Grading The Company has established a standardized emergency drill mechanism that clarifies the drill cycles, standards, and requirements
and Scoring Standards for Work Safety Standardization of Industrial and Commercial Enterprises, "the Company constructed a basic for comprehensive emergency response plans and specialized emergency response plans. On-site disposal plans must ensure
safety documentation list consisting of 12 elements and 125 detailed rules. full-coverage drill implementation, with special attention to the effectiveness of emergency response plan drills involving major
During the reporting period, the Steel City Base passed the secondary standardization review and verification of Shandong Province's hazard sources. Simultaneously, the Company promotes routine "four-not" emergency drills to effectively validate each unit's on-
safe production standards. The Rizhao Base maintains the tertiary standardization level and continues to promote the extension of site emergency response capability and continuously strengthen the safe production defense line. In 2025, the Company conducted
standardization requirements to related parties through self-assessment, achieving integrated safety management. drills for 11 comprehensive emergency response plans, 67 specialized emergency response plans, and 954 on-site disposal plans,
comprehensively enhancing the level of emergency response
and risk prevention and control.
In terms of fire management, the Company strictly
implements the work policy of "Prevention first, combination
of prevention and fire fighting". It organizes fire safety
inspections, identifies 169 fire hazards and completes
closed-loop rectification. In 2025, the Company organized
goal of "zero occurrence" of major fire accidents for the year.
Case??? The Company Successfully Hosts Jinan Emergency Drill
In June 2025, the Company hosted a high-standard emergency response drill for steel enterprises in Jinan simulating
Rizhao Base blast furnace hearth burnthrough. The drill simulated hazardous situations triggered by abnormal blast furnace
operations and personnel entrapment scenarios. The enterprise rapidly activated emergency response plans,
established command structures to coordinate rescue operations, and various task forces coordinated seamlessly
to complete rescue and treatment exercise tasks efficiently and successfully conclude the exercise on schedule,
demonstrating the Company's commitment to public safety governance.
Case??? Rizhao Base Organizes Fire Prevention Facility Hazard Elimination Campaign
In January 2025, the Rizhao Base established a cross-departmental
task force to launch a six-month fire prevention facility hazard
elimination campaign. The task force established a "daily dispatch
- weekly advancement - monthly evaluation" management system,
comprehensively coordinating various workshops, procurement
Steel City Base - Laiwu Iron and Steel Group Yinshan Section Steel Co., Ltd. departments, construction, supervision, and maintenance units
to thoroughly address existing fire equipment and facility hazards
including missing equipment, offline linkage failures, frequent
false alarms, and aging equipment. The reliability and operational
efficiency of critical fire prevention equipment and facilities,
including fire alarm systems, automatic fire suppression systems, water systems, and linkage control systems, have all
been significantly improved.
Related Party Management
The Company strictly implements "four unifications" control standards for related parties, implements precise control around "six
links," and improves the safety performance evaluation mechanism for cooperative suppliers. The Company has formulated the
"Cooperative Supplier Safety Management Standards" and implemented an admission system to strengthen upstream management.
In 2025, the Company identified and corrected 498 related party hazards, established a blacklist system to remove non-compliant
Shandong Steel units, related parties' violations decreased year-on-year, and safety performance continued to improve steadily.
Impacts, Risks and Opportunity Management The "Smart Security" System of Rizhao
Base has been fully put into use and deeply
integrated into daily safety management,
The Company manages safety risks with scientific approaches, clarifying the objectives of ensuring safe production, reducing
driving a key transformation of the Company's
hidden hazards, and enhancing employee safety awareness. Taking the three-year action plan for safety production "fundamental
remediation" as an opportunity, the Company improves its responsibility system, deepens intelligent control, and builds multiple safety management model from traditional
quantitative measures and specialized initiatives to fortify the essential safety defense line, protecting safe production operations and paper-based to modern digital and intelligent.
employee safety. The system covers 25 functional modules
including objective management, institutional
Risk and Opportunity Identification Response Measures responsibilities, system development, training
capacity, contractor safety, occupational
Optimize the responsibility system, dynamically update duty performance health, labor protection articles, "Three
Intensifying industry competition, with some
checklists, and achieve full coverage of quarterly safety evaluations by plant Simultaneities" management, special
units neglecting safe production in cost
leaders; implement hierarchical assessment, clarify responsibility boundaries,
reduction and efficiency improvement efforts equipment, hazardous chemicals, major
and improve the timeliness of duty performance.
hazard sources, fire safety, maintenance Rizhao Base "Smart Security" System
Integrate safety targets into company strategy, achieve 100% execution rate operation, emergency management, dual
Increasingly stringent environmental and safety
of "three simultaneous" requirements for construction projects; complete prevention mechanism, accident management, safety performance of duties, and safety performance, forming a full-domain digital
compliance standards, upgraded regulatory
assessment and filing of hazardous chemical major hazard sources, pass and intelligent safety management and control system.
requirements, increased compliance investment
secondary safety production standardization re-evaluation by Shandong
and operation and maintenance pressures
Province
Conduct monthly major hazard screening and achieve dynamic clearance of
Key field risks such as hazardous chemicals and
hazards, complete safety essential transformation; empower risk early warning Case??? Special Equipment Safety Management and Control Practice
high-temperature molten metals are complex
through intelligent upgrading, achieve 100% major hazard placard supervision
with difficult-to-manage dynamic risks
rate In 2025, the Company obtained the qualification for special equipment inspection station, completed the modification
and cancellation of 381 lifting machinery and regular inspection of 423 units, and carried out diagnostic inspections to
Strengthening Safety Risk Management rectify 135 hidden dangers. It organized 70 training sessions for special type of work certification and re-examination,
with 3,212 person-times trained, ensuring that the certification rate of special equipment operators reached 100%,
The Company adheres to a "zero tolerance for safety violations" bottom line, focusing on "three major and the equipment itself as well as its safety accessories and protection devices were always in sound and effective
hazard sources" including molten metals, coal gas, and hazardous chemicals, to break through pain operation.
Advancing Safety
points in industry safety management. The Company innovatively constructs a management and
Production
control system of "smart prevention enablement, closed-loop defect elimination, cultural radiation, and
Fundamental
collaborative prevention," driving safety management toward active prevention and precise strategic
Remediation
implementation. The Company has implemented the "one plan three-list" approach to achieve safety
risks that are preventable, controllable, and traceable.
Occupational Health Protection
The Company strictly implements "three simultaneous" safety management for construction projects,
completes procedural handling of key projects and special safety assessments for hazardous chemical- The Company strictly complies with occupational health management regulations and has constructed a comprehensive occupational
Full- related enterprises. Centering on major events and critical production phases, the Company intensifies
health protection system covering the full work process, rigorously managing pollutant emissions across all production and operation
Process Risk key link inspections and supervision to resolve management coordination blind spots. The Rizhao
Prevention and Base, in response to risks in the Mid-term Maintenance of Blast Furnace No.2, optimized plan review stages to ensure stable compliant discharge and effectively prevent adverse impacts on employees. During the reporting period, the
Control and team allocation, conducted six specialized training sessions for personnel supervising high-risk Company experienced no occupational health damage incidents caused by pollutant emissions.
operations, implemented grid-based supervision and "offline + online" full-process monitoring to ensure
maintenance safety and controllability. In 2025, the Company comprehensively advanced detection and closed-loop remediation of dust, high-temperature, and other hazard
factors, completed noise reduction transformation projects, strictly implemented labor protection regulations, and coordinated health
In 2025, the Company adheres to a problem-oriented approach, identifying and correcting hidden hazards check-ups covering new hires, current employees, and departing workers totaling 9,145 person-times. The Company adjusted 28
through multiple channels including specialist inspections, routine audits, and technical monitoring
Strengthening employees with occupational contraindications and achieved 100% participation rate and 100% establishment rate for employee
across work processes, equipment and facilities, personnel operations, and work environment aspects.
Closed- health records. The Company reported zero new occupational disease cases throughout the year, establishing a multi-dimensional
The Company has established a comprehensive management mechanism implementing placard-based
Loop Hazard occupational health and safety defense line.
supervision and dynamic clearance of major hazards. The Rizhao Base conducted targeted specialist
Rectification
inspections in electrical, high-temperature molten metal, and confined space fields, comprehensively
completed multi-dimensional hazard rectification, and prevented and mitigated operational safety risks.
In 2025, the Company implemented 31 safety essential technology transformation projects, advancing
coal gas cabinet safety instrumented systems construction to eliminate waste gas transmission safety
Deepening hazards. The Rizhao Base launched the intelligent safety protection system, which comprehensively
Intelligent covers all requirements of safety production standardization and dual-prevention mechanisms, Number of health monitoring Physical examination New occupational disease
Safety integrating video surveillance, safety production risk monitoring and early warning, special equipment
physical examinations participation rate cases
Construction management, dangerous operation control systems, and other functions. The system has solidified
the Company's specific safety management measures into the system, enabling dynamic risk early Health file establishment rate
warning and scientific decision-making while enhancing the standardization and intelligence level of
safety management.
Safety Culture Construction Metrics and Targets
In 2025, the Company optimized its safety culture
In 2025, the Company achieved the core safety production goals of "Six Zeroes" and "Seven 100%". It resolutely prevented all kinds
construction system with multi-dimensional enabling across
precision, technology, and full-staff participation as the core,
realizing universal safety training coverage through tiered
fundamental defense line for occupational health and safety production.
training, innovative forms, thematic activities, and skills Total training investment Workplace safety training
competitions. amounted Short-Term Targets (2025)
Adhering to the safety concept of "putting people first", the
Company has built a comprehensive and multi-level safety Achieving Safe Production "Six Zeros" Completing "Seven 100%" Compliance Tasks
culture system. With systematic training and distinctive
Zero general or above production safety 100% compliance rate for "three simultaneous" requirements
activities as the starting point, the Company promotes the
rooting of safety culture. Focusing on improving safety
100% testing rate for special equipment safety and technical
capabilities and fostering a safety atmosphere throughout ??Employee participations The safety training coverage Zero major or above fire accidents
?conditions
Zero major or above equipment accidents
the year, the Company has achieved 100% coverage of safety rate stood
training for all employees through diverse forms such as 100% certification rate for special operation personnel in
special training, experiential teaching, themed activities, and Zero major or above production accidents ? actual work assignments
100% safety training and education rate for employees and
Zero major or above traffic accidents for which
skills competitions.
? related parties
In 2025, the Company continued to increase the total investment in workplace safety training, strengthened employees' risk
? the Company bears primary responsibility 100% physical examination rate for workers in positions
awareness, operational procedures and emergency response capabilities, organized security personnel to complete special training
on human rights policies and procedures, and built a strong ideological line of defense and practical foundation for workplace safety. Zero related party accidents for which the ? with toxic/harmful exposure
? Company bears primary responsibility 100% testing rate for occupational disease hazard factors in
? work environments
Case??? Leading with Distinctive Thematic Activities to Foster Strong Safety Atmosphere 100% implementation rate for hazard rectification
The Rizhao Base has implemented the "Safety Guardian" initiative,
conducting hazard investigation and remediation through the Medium- and Long-Term Development Roadmap
"Safe Production Cup" competition as a carrier and continuously
advancing routine labor protection supervision and inspections.
The Base has launched the "Zero-Violation Shift Team" creation Continuously deepen the three-year action plan for safety production "fundamental remediation,"
and assessment activities, promoting company-wide hazard constructing a normalized mechanism for dynamic clearance of major accident hazards, and substantially
Medium-Term Targets elevating the Company's intrinsic safety level. Perfect the "people protection, technology protection,
source identification and standardized work implementation.
(1–5 Years) engineering protection, and management protection" four-in-one risk prevention and control system,
The Steel City Base promotes experiential training utilizing VR/AR forming a comprehensive and multi-level safety protection landscape, and promoting normalization and
simulation of high-risk scenarios, expanding the coverage of its standardization of occupational health and safe production management.
sensory experience center services. In 2025, the Base organized
Establish a forward-looking safety prevention and control system that surpasses industry standards,
achieving comprehensive upgrading of the occupational health and safe production governance system
Long-Term Targets from "tangible coverage" to "deepened operations." Using benchmark leadership to advance industry
(5+ Years) development, building a demonstration model in occupational health and safe production management, and
Case??? The Company Launches the "Joint Operation • Family-Caring Safety Assistance" Work Safety Practice Activity providing solid safety assurance for the Company's sustainable development.
The Rizhao Base Hot Rolling Mill Trade Union, jointly with the
Safety Management Office, conducted the "Joint Operation •
Family-Caring Safety Assistance" activity. The activity invited
employee family members to tour production lines and innovation The Company received the 2025 Shandong Province Emergency Management Popular Law Knowledge Competition
workshops, incorporating electrical safety explanations,
Excellent Organization Award and achieved excellent results in the Fourth "Safe and Sound Cup" Municipal
interesting Q&A, and family safety letter readings, combined
Managed Industrial and Commercial Enterprise Safety Production Knowledge Competition.
with children's talent performances and hazard-finding puzzles.
Using family affection as the bond, the activity integrated safety
concepts into work and life, weaving a dense safe production
protection network and solidifying the safety foundation for the Looking forward, the Company will advance with a sense of responsibility that "leaves room for concern at all times" and execution
realization of the enterprise's phased targets. power that "has certainty in all matters," solidly promote the final phase of the three-year action plan for safety production
"fundamental remediation," and systematically advance comprehensive upgrading across five dimensions of responsibility system
implementation, risk prevention and control, foundation assurance, science and technology enabling, and culture building.
Social Welfare Community Co-Building
Shandong Steel adheres to the principle of "originating from society, giving back to society," using party building as the guide,
deepening enterprise-local integration through paired co-building, livelihood assistance, and outcome sharing, establishing a
Shandong Steel upholds the core values of "co-creation, co-progress, and co-prosperity," deeply integrating the fulfillment of social
responsibility into enterprise strategy and daily operations. The Company systematically advances rural revitalization, community standardized community management system with long-term mechanisms ensuring implementation.
co-building, volunteer service, and charitable donation work, actively fulfilling social responsibilities, effectively responding to social The Company ensures the deep integration of party building work and community governance through institutionalized governance
concerns, and contributing enterprise strength to achieve social harmony and sustainable development.
mechanisms, establishing a multi-dimensional governance network covering industrial resource downward flow, precise assistance,
and joint construction of love libraries, significantly enhancing community governance effectiveness and resident happiness.
Rural Revitalization
The Company actively responds to the national Rural Revitalization strategy, transforming enterprise resource advantages into Case??? Steel City Base Pairs with Local Community in Co-Building to Enhance Community Governance Effectiveness
strong momentum for rural development through multiple measures including dispatching resident first secretaries, implementing
the "Warm-Hearted Benefit to Farmers" livelihood project, and conducting consumer-driven assistance, writing new chapters in Using party building as the bond, the Steel City Base pairs with the local community in co-building to enhance governance
integrated enterprise-local development. effectiveness. The second party branch of the bar mill rolling steel workshop leverages technical expertise to reinforce
Precise Assistance with Heart-Warming Support for Villagers aging dangerous bridges, addressing resident traffic safety concerns; organizes "agricultural benefit public welfare
promoting development" activities, establishing agricultural product sales platforms, and provides material assistance to
To thoroughly implement Jinan's "tens of thousands families in difficulty through the "clothing and books building dreams" public benefit initiative. The organization office first
going to villages, thousands of villages improved" branch focuses on caring for children with special needs, coordinating with social forces to conduct warm companionship
project, the Company dispatched outstanding cadre activities, effectively enhancing residents' sense of gain, safety, and happiness.
Liu Defeng to serve as resident first secretary of
Xiaxiashang Post-Village under Wenyuan Subdistrict,
Steel City District. In 2025, the Company made
multiple visits to the village, providing material
support for the "Happiness Canteen," donating warm
clothing to lonely elderly residents during Chinese
Public Welfare Activities
New Year, and delivering essential livelihood supplies
such as rice, flour, and cooking oil to families in The Company continuously improves its public welfare and charity management system, using volunteer service organizations such
difficulty, effectively conveying enterprise care. as "Love Alliance" and "Little Raindrops" as carriers, conducting diverse public welfare activities, and transforming the enterprise's
social responsibility into concrete social service action.
"Warm-Hearted Benefit to Farmers" Livelihood Project Supporting Rural Development Exam Support
The Company actively fulfills social responsibility, achieving remarkable results in consumer-driven assistance, industrial During the national college entrance examination in June 2025, the Company Communist
tourism, and livelihood supply heating. Youth League Committee set up "Caring Exam Support Service Points" at Laigang High
School and Laiwu No.4 High School, built cool rest areas, and provided free mineral water,
Consumer-Driven Assistance Boosting Agricultural Income exam stationery and other supplies to candidates and parents. The thoughtful services
eased the tense atmosphere before exams and escorted dreams.
The Company actively fulfills its social responsibilities, implements poverty alleviation through consumption, and supports
the comprehensive advancement of rural revitalization. Through the labor union, the Company purchased 1,100 portions Scholarship-Driven Dream Realization
of featured agricultural products from Xinjiang, worth more than 106,700 yuan. It carried out the "Coolness in Summer"
campaign, and purchased more than 12,500 kilograms of watermelons from Juye County, Heze City, the village stationed by The Rizhao Base Iron Smelting Plant "Love Alliance" volunteer service team actively
the First Secretary of the Group, which was well-received by local melon farmers. fundraises, dedicating funds specifically to scholarship donations for two children from
impoverished families in Bishiguo Village, Lanshan District. The initiative genuinely helps
children overcome practical difficulties in their pursuit of education, supporting them
Industrial Tourism Driving Research-Study Tourism to study with peace of mind and pursue dreams with confidence, demonstrating the
enterprise's social responsibility through concrete action.
The Company fully leverages the resource advantages of the Rizhao Base as a national AAA-level industrial tourism scenic
area, actively conducting industrial research-study activities, attracting significant numbers of students and social groups to Caring for and Respecting the Elderly
visit, and effectively promoting deep integration of cultural tourism and rural economy.
The "Little Raindrops" Charity Association of the Special Steel Plant of Steel City Base has continuously provided volunteer services at
institutions including Wenhe Nursing Home in Gangcheng District, Jinan City, offering daily care and spiritual comfort to lonely elderly
Waste Heat Heating Benefits People and Assists Agriculture people and warming their later life with company. By the end of 2025, the "Little Raindrops" Charity Association had conducted more
than 50 volunteer services, paired up to support 18 disadvantaged families in surrounding areas, served over 2,000 people including
The Company extends its green and low-carbon development philosophy to people’s livelihood. Utilizing zero-carbon waste lonely elderly people, disabled children and community residents, and raised a total of 174,900 yuan in relief funds. With concrete
heat from industrial production, the Company provides clean heating for 10 residential communities in Taoluo Town, Rizhao actions, the Company fulfills its social responsibilities, conveys corporate warmth, and contributes to building a harmonious and
City, covering an area of 300,000 square meters, radiating to 18 administrative villages, and benefiting more than 5,000 friendly community environment.
households and over 700 breeding households. It has become a vivid model of industry nurturing agriculture and urban areas
supporting rural areas.
Appendix Indicator Unit 2023 2024 2025
Responding to Investor Questions NOS 356 375 269
ESG Key Data Table
Investor Relations Questionnaires NOS 1 1 1
Economic Performance Indicators Number of Regular Announcements NOS 4 4 4
Indicator Unit 2023 2024 2025 Number of Temporary Announcements NOS 49 80 100
Operating Revenue Ten Thousand Yuan 9,047,506.18 8,209,409.31 6,725,282.45 Proportion of Independent Directors Serving as Independent
% 0 0 0
Directors in More than 3 Listed Companies
Profit / (loss) before tax Ten Thousand Yuan -9,821.6 -250,718.71 48,472.36
Proportion of Independent Directors Serving as Directors in
% 0 0 0
More than 6 Listed Companies
Total Tax Payment Ten Thousand Yuan 86,721.45 91,809.81 183,928.77
Percentage of Directors Receiving Anti-Commercial Bribery
Total Cash Dividends (Including Tax)4 Ten Thousand Yuan 32,096.55 12,038.52 7,998.74 % 100 100 100
and Anti-Corruption Training
Cash Dividends per 10 Shares Yuan 0.3 0.11 0.08 Percentage of Management Receiving Anti-Commercial
% 100 100 100
Bribery and Anti-Corruption Training
Social Contribution Value per Share Yuan/Share 0.45 0.25 0.66
Percentage of Employees Receiving Anti-Commercial Bribery
% 100 100 100
and Anti-Corruption Training
Governance Performance Indicators
Proportion of Operating Sites That Have Conducted Internal
Audits/Risk Assessments for Business Ethics Issues to the % 100 100 100
Total Number of Operating Sites
Indicator Unit 2023 2024 2025
Environmental Performance Indicators
Proportion of Independent Directors % 43 44 44
Proportion of Female Directors % - 11 11 Indicator Unit 2023 2024 2025
Number of Board Meetings Times 11 16 13 Environmental Management
Hundred Million
Number of Meetings of the Strategy Planning and ESG Committee Times 1 3 1 Environmental Protection Investment 4.2 11.72 11.5
Yuan
Number of Meetings of the Risk Management and Audit Committee Times 4 7 6 Number of Environmental Pollution Incidents Case 0 0 0
Environmental Protection Fines Incurred During the Ten Thousand
Number of Meetings of the Budget, Compensation and Appraisal 0 0 0
Times 2 2 1 Fiscal Year Yuan
Committee
Coverage Rate of Environmental Protection Training % 100 100 100
Number of Meetings of the Nomination Committee Times 2 8 6
Environmental Performance Rating(Grade A is the A A A
highest level of environmental performance rating)
Frequency of Performance Releases Times 3 3 3
%
Proportion of Operations Certified by Environmental
Management System
Investment Bank Strategy Meetings Sessions 1 2 3
%
Proportion of Operations Certified by Energy Management
System
Hosting Investor Visits Persons 16 46 19
Energy Utilization
In 2025, the Company acquired 100% equity interest in Yinshan Section Steel. Compared with previous years, the relevant data have
Tonne of
been adjusted to include Yinshan Section Steel due to the change in consolidation scope. Energy Consumption 8,058,786.11 7,052,242.49 10,289,308.09
Standard Coal
The total dividends for 2025 equal the actual cash amount used by Shandong Steel to repurchase shares during the year. According Hundred Million
to Article 8 of the Shanghai Stock Exchange’s Self-Regulatory Guidelines No.7 for Listed Companies-Share Repurchase, when a listed Self-generated Electricity 31.62 30.61 43.61
kWh
company repurchases shares via centralized bidding or tender offer with cash consideration, the amount spent on share repurchases
during the year shall be regarded as cash dividends and included in the calculation of the annual cash dividend ratio.
Indicator Unit 2023 2024 2025
Social Performance Indicators
Water Resources Utilization Indicator Unit 2023 2024 2025
Employees
Total Annual Water Consumption Ten Thousand m3 4,258.83 4,135.02 4,506.83
Total Number of Employees Person 16,535 16,031 18,844
Fresh Water Consumption Ten Thousand m3 3,481.06 3,174.79 4,121.98
Number of Male Employees Person 14,573 14,181 16,670
Water Recycling and Reuse Rate % 98.3 97.04 98.48
Number of Female Employees Person 1,962 1,850 2,174
m3 / Tonne of
Fresh Water Consumption Intensity 2.34 2.125 2.26
Crude Steel Number of Employees Aged 30 or younger Person 2,029 2,018 2,070
Ten Thousand
Total Waste Water Discharge 646.4 674.1 546.26
Tonnes Number of Employees Aged 30-50 Person 11,222 9,556 10,790
COD Discharge in Waste Water Tonne 133.03 124.43 91.23 Number of Employees Aged 50 or older Person 3,284 4,457 5,984
Ammonia Nitrogen Discharge in Waste Water Tonne 1.64 3.343 2.95 Number of Ethnic Minority Employees Person 130 91 143
Pollution Emissions Number of Employees with Disabilities Person 51 41 74
Particulate Matter (PM) Emissions Tonne 3,677.96 2,658.81 3,948.11 Proportion of Employees with Disabilities % 0.31 0.26 0.39
Sulfur Dioxide (SO2) Emissions Tonne 1,520.72 1,404.19 2,219.22 Number of Veterans Recruited Person 3 5 6
Employees Turnover Rate % 0.35 0.57 0.6
Nitrogen Oxides (NOx) Emissions Tonne 3,545.07 4,083.57 5,678.85
Turnover Rate of Male Employees % 0.22 0.48 0.57
Solid Waste
Turnover Rate of Female Employees % 0.04 0.09 0.03
Ten Thousand
Total Waste Generation 930.60 833.95 1,110.52
Tonnes
Investment Amount of Employee Work Safety Liability Ten Thousand
Ten Thousand 103.85 98.42 107.91
General Waste Generation 893.46 795.34 1,098.42 Insurance5 Yuan
Tonnes
Ten Thousand Investment Amount of Employee Work-Related Injury
General Waste Recycled 892.06 794.47 1,097.47 Ten Thousand
Tonnes 2,000.27 2,221.16 2,111.77
Insurance Yuan
Ten Thousand
General Waste Disposal 1.4 0.87 0.95
Tonnes Employee Work-Related Injury Insurance Coverage Rate % 100 100 100
Ten Thousand
Hazardous Waste Generation 37.14 38.61 12.1
Tonnes Labor Contract Signing Rate % 100 100 100
Ten Thousand
Hazardous Waste Harmless Treatment Volume 37.14 38.61 12.1 Proportion of People Covered by Collective Agreements % 100 100 100
Tonnes
Waste Recycling Rate % 95.86 95.27 98.82 Number of Labor Dispute Cases Cases 0 0 0
Cleaner Production Number of Discrimination and Harassment Related
Cases 0 0 0
Incidents
Scrap Steel Recovery Rate % 100 100 100
Proportion of Employees Receiving Anti-Discrimination
%
% 100 100 100
Comprehensive Utilization Rate of Steel Slag 100 100 100 and Anti-Human Rights Infringement Training
Greenhouse Gas Emissions Social Insurance Coverage Rate % 100 100 100
Total Number of Female Employees on Parental Leave Person 169 158 177
Direct (Scope 1) Greenhouse Gas Emissions tCO2 e? 24,512,877 24,821,339 29,932,954
Return Rate and Retention Rate of Female Employees on
Indirect (Scope 2) Greenhouse Gas Emissions tCO2 e? 2,670,937 2,331,860 2,214,487 % 100 100 100
Parental Leave
Total Greenhouse Gas Emissions (Scope 1 and Scope 2) tCO2 e? 27,183,814 27,153,199 32,147,441
Number of Assisted Employees in Difficulty Person 193 352 459
Data for 2023 and 2024 have been restated due to changes in statistical scope.
Indicator Unit 2023 2024 2025 Indicator Unit 2023 2024 2025
Average Annual Paid Leave Days Per Employee Day 9 9.5 9.6 Total Number of Illegal and Regulatory Violations
Concerning Health and Safety, Labeling of Products and Cases 0 0 0
%
Services Provided
Employee Satisfaction 100 100 100
Complaint Resolution Rate % 100 100 100
Employee Training Coverage Rate % 100 100 100
Customer Satisfaction Score 89 90 90.1
Total Employee Training Hours Hour 4,071,062 4,102,890 4,139,127
Total Number of Illegal and Regulatory Violations
Cases 0 0 0
Average Training Hours Per Employee6 Hour 85 99 92 Concerning Customer Privacy
%
Proportion of Employees Receiving Regular Performance Supplier Management
and Career Development Assessments
Total Number of Suppliers NOS 2,564 1,980 2,231
Occupational Health and Safety
Proportion of Suppliers in the Mainland % 100 100 100
Hundred
Total Safe Production Investment 1.28 1.2 1.15 Green Procurement Proportion of Materials and Spare
Million Yuan % 100 100 100
Parts
Proportion of Safe Production Investment in Operating
% 0.14 0.14 0.11
Revenue P ro p o r t i o n o f L o ca l E q u i p m e n t a n d M a t e r i a l s
% 72.54 61 27.52
Procurement
Hundred
Safety Training Investment Cost 0.04 0.03 0.02
Million Yuan Data Security and Privacy Protection
Number of Safe Production Accidents Cases 0 0 0 Number of Information Security Leakage Incidents % 0 0 0
Number of Work-Related Deaths (In-House Employees Coverage Rate of Data Security/Customer Privacy
Person 0 0 0 Case 100 100 100
and Dispatched Workers) Protection Related Training
Work-Related Injury Rate % 0 0 0 R&D and Innovation
Ten Thousand
injuries R&D Investment 285,519.33 270,779.22 353,770.24
Yuan
per million
LTIFR (Lost Time Injury Frequency Rate) 0 0 0
hours
Proportion of R&D Investment in Operating Revenue % 3.16 3.3 5.26
worked
Number of R&D Personnel Person 1,776 1,747 2,036
Working Days Lost Due to Work-Related Injuries Day 0 0 0
Proportion of R&D Personnel % 10.47 10.9 10.8
Person-
Number of Participants in Safe Production Training 156,450 188,912 175,922
Times Number of Invention Patents Applied to Core Business
PCS 686 979 1,174
Operations
Total Safe Production Training Hours Hour 1,356,201 2,265,481 2,022,476
Number of Invention Patents Applied PCS 548 544 277
Occupational Health Examination Coverage Rate % 100 100 100
Number of Invention Patents Granted PCS 426 381 208
Number of New Occupational Diseases Person 0 0 0
Number of Software Copyrights PCS 19 13 2
Safety Risk Protection Training Coverage Rate % 100 100 100
Rural Revitalization and Social Contribution
Products and Customer Service
Ten Thousand
Investment in Rural Revitalization 49.8 9.8 10.67
Amount of Compensation Involved in Major Liability Yuan
Ten Thousand
Accidents Related to Product and Service Safety and 0 0 0
Yuan
Quality Occurred During the Reporting Period Number of Volunteer Service Participants Person 3,078 3,425 3,592
Specific Amount Involved in Customer Privacy Leakage Ten Thousand
Incidents Yuan
Average Volunteer Service Hours Per Person Hour 21 16 15
Calculation Formula for Average Training Hours per Capita = Σ (Training Hours per Session × Number of Participants per Session) ÷ Σ
Number of Participants per Session
GRI Standards Index
Disclosure Item Corresponding Section
Shandong Steel compiled this report with reference to GRI Standards for the period
Instructions for Use
January 1 to December 31, 2025. Corporate Governance
Business Ethics
GRI Standards Used GRI 1: Foundation 2021
Corporate Governance
Disclosure Item Corresponding Section Employees
Corporate Governance
GRI 2: General Disclosures 2021 2-20 Process to determine remuneration
Employees
Chairman's Message
ESG Governance
Business Ethics
Supply Chain Security
About Shandong Steel
ESG Key Data Table 2-24 Embedding policy commitments
Supply Chain Security
Compliance and Risk Management
About Shandong Steel 2-25 Processes to remediate negative impacts
Product and Service Safety and Quality
Product and Service Safety and Quality ESG Governance
Employees Business Ethics
ESG Key Data Table
Occupational Health and Safety
Supply Chain Security 2-28 Membership associations
Innovation-Driven Development
Corporate Governance
ESG Governance 2-29 Approach to stakeholder engagement ESG Governance
Please refer to the Company's 2025 Annual Report
of impacts
ESG Governance
Disclosure Item Corresponding Section Disclosure Item Corresponding Section
GRI 201: Economic Performance 2016 GRI 302: Energy 2016
climate change Addressing Climate Change
GRI 303: Water and Effluents 2018
GRI 203: Indirect Economic Impacts 2016
GRI 204: Procurement Practices 2016
GRI 205: Anti-Corruption 2016
GRI 304: Biodiversity 2016
Business Ethics protected areas and areas of high biodiversity value outside Ecosystem and Biodiversity Protection
procedures
protected areas
Ecosystem and Biodiversity Protection
biodiversity
GRI 207: Tax 2019
Tax Management
tax
GRI 301: Materials 2016
The core business of the company has limited
Energy Utilization relevance to this information or it is of low materiality
Circular Economy
Addressing Climate Change
Addressing Climate Change
ESG Key Data Table
Disclosure Item Corresponding Section Disclosure Item Corresponding Section
The company's production and business activities do Employees
not produce ODS Occupational Health and Safety
Occupational Health and Safety
emissions directly linked by business relationships
ESG Key Data Table
GRI 306: Waste 2020 Occupational Health and Safety
system
ESG Key Data Table
Waste Management
Circular Economy Occupational Health and Safety
ESG Key Data Table
GRI 404: Training and Education 2016
Employees
GRI 308: Supplier Environmental Assessment 2016 404-2 Programs for upgrading employee skills and transition assistance
Employees
programs
taken ESG Key Data Table
GRI 405: Diversity and Equal Opportunity 2016
GRI 401: Employment 2016
Employees
Employees ESG Key Data Table
ESG Key Data Table
GRI 406: Non-Discrimination 2016
Employees
temporary or part-time employees 406-1 Incidents of discrimination and corrective actions taken Employees
GRI 402: Labor-Management Relations 2016 407-1 Operations and suppliers in which the right to freedom of Employees
The company currently has no major operational association and collective bargaining may be at risk Supply Chain Security
changes
GRI 408: Child Labor 2016
GRI 403: Occupational Health and Safety 2018
GRI 409: Forced or Compulsory Labor 2016
or compulsory labor Supply Chain Security
GRI 410: Security Practices 2016
occupational health and safety Occupational Health and Safety
Disclosure Item Corresponding Section Topic Disclosure Index
GRI 413: Local Communities 2016 Guidelines No.14 of Shanghai Stock Exchange for Self-Regulation of Listed
and development programs Social Welfare and Community Benefit
The company has not identified any operations with Dimension No. Topic Clause Location
actual or potential significant negative impacts on
local communities
local communities
GRI 414: Supplier Social Assessment 2016
Supply Chain Security
ESG Key Data Table 3 Waste Disposal Article 31 Waste Management
Protection
Environmental
GRI 415: Public Policy 2016 Environmental Compliance
Management
The core business of the company has limited
relevance to this information or it is of low materiality 6 Energy Utilization Article 35 Energy Utilization
GRI 416: Customer Health and Safety 2016 7 Water Resource Utilization Article 36 Energy Utilization
Product and Service Safety and Quality 8 Circular Economy Article 37 Circular Economy
categories
ESG Key Data Table
impacts of products and services
GRI 417: Marketing and Labeling 2016
information and labeling ESG Key Data Table
Social 13 Supply Chain Security Article 45 Supply Chain Security
Product and Service Safety and Quality
ESG Key Data Table
GRI 418: Customer Privacy 2016 Product and Service Safety and
Quality
Data Security and Privacy
and losses of customer data ESG Key Data Table 16 Data Security and Customer Privacy Article 48
Protection
GRI 419: Socioeconomic Compliance 2016 17 Employees Article 50 Employees
economic area in the social and economic sphere
Governance
Anti-Commercial Bribery and Anti-
Corruption
Feedback Form
Dear Reader：
Thank you for reading this report. To continuously optimize the company's ESG management system, enhance sustainable
development capacity, and improve the quality of report disclosures, we sincerely hope to hear your opinions and suggestions. We
earnestly ask you to evaluate this report despite your busy schedule. Your feedback will be an important basis for our improvement
efforts. Please help us complete the following feedback form and submit it in the designated manner. We express our most sincere
gratitude for your support and assistance!
Shandong Iron and Steel Co., Ltd. ESG Work Office
Contact Address: No. 99 Fuqian Street, Gangcheng District, Jinan
Telephone: 0531-77920789???Email: sdgt600022@126.com
Postal Code: 271104??????Fax: 0531-77920798
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Shandong Iron and Steel Co., Ltd.
Sustainability Report
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