China: Govt working on regulating steel production, phasing out inefficient capacity

• China plans to eliminate ‘involution-style’ competition
• EAF production gains support amid low-carbon push

Mysteel Global: Chinese authorities are working on detailed measures to regulate steel production, with a focus on phasing out inefficient capacity, Luo Tiejun, Vice Chairman of the China Iron and Steel Association (CISA), revealed at the general assembly of the association’s electric-arc-furnace (EAF) division on 31 March.

“Government ministries are currently refining capacity control schemes in line with the roadmap of (China’s) 15th Five-Year Plan to tackle ‘involution-style’ competition in the steel industry,” Luo said.

“Steelmaking companies should carefully assess their competitiveness and profitability against a backdrop of weakening steel demand and weigh their next moves with caution,” he advised.

Despite the challenging environment, Luo highlighted a series of supportive policies for EAF steel making that have been introduced in the past year, with the EAF process viewed as a key pathway for the industry’s low-carbon transition.

For example, in January this year, China unveiled an action plan to promote the application of recycled materials, aiming to achieve an annual recycling volume of over 300 million tonnes (mnt) of steel scrap by 2030. By 2025, China’s total steel scrap recycling volume was around 227 mnt, Luo noted.

Moreover, the Government Work Report released in March by the State Council had, for the first time, set a binding goal of cutting carbon intensity by 3.8% during this year, underscoring China’s strong commitment to advancing a low-carbon economy, Luo stressed.

With policy backing, ten domestic EAF steel mills have been named among the first batch of leading enterprises compliant with the steel industry’s new regulatory standards, according to the latest announcement released by the country’s Ministry of Industry and Information Technology.

“As green development deepens, the prospects for EAF steel producers are set to become increasingly favourable,” he emphasised.

Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.