During the 14th Five-Year Plan period (2021-2025), China will continue with the steel capacity upgrading, replacing 236 million tonnes/year of old steelmaking capacity with 221 million t/y of new capacity, He Wenbo, executive chairman of the China Iron and Steel Association (CISA) disclosed at the 11th China International Steel Congress in Shanghai on May 27.
“China has been executing the largest-ever steel capacity upgrading plan in the global steel history,” He told the delegates. This is the continuity of China’s efforts in the aspect as over 2016-2020, or the country’s 13th Five-Year Plan period, it had completed replacing 86 million t/y of old steelmaking capacity with 80 million t/y of new capacity, according to him.
The minor difference is probably due to the various replacement ratio in accordance with the country’s new guidelines in iron and steel capacity swaps that are effective on June 1, setting the ratios at 1.5:1 for those heavily-polluted areas or 1.25:1 elsewhere for blast furnaces or 1:1 for the erection of electric arc furnaces in exchange for old blast furnaces, Mysteel Global noted.
The upgrading plan is playing a crucial role for the country’s steel industry to go green and low carbon emission in the future, as it will change the steelmaking structure from the root, and “other than watching out for overcapacity, we should also pay attention to sufficient green steel capacity,” he emphasized.
Meanwhile, Beijing has been urging low carbon emission among the Chinese steel mills, and by the end of February, about 620 million t/y of crude steel capacity under 229 domestic steel mills have submitted documents proving them either having met or been progressing towards ultra-low carbon emission targets, and 350 million t/y crude steel capacity under 110 domestic steel mills in major steelmaking area have completed or in the middle of reviewing, He shared.
Over 2016-2020, China had made significant progress in nurturing eco-friendliness in the domestic steel industry mainly via technological or production line upgrading, and by the end of 2020, the average energy consumption among China’s medium- and large steel mills had decreased by 58%, and smoke and dust emissions had reduced by 48%, He shared.
“More Chinese steel producers have converted their worksites into a ‘garden plant’ via investments and unwavering efforts,” He said, joking that “steel mills will be left no choice either, either a garden plant or only a garden”.
He acknowledged that the country’s steel industry is still facing all the difficulties and challenges in carbon emission reduction, as the country is still in the middle of urbanisation and its steel scrap recycling capacity has stayed low, heavy investments will be needed in the aspect, and the giant size and uneven development by region in China’s steel industry has also made it hard to meet the low carbon emission standards in a short time.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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