To achieve ecologically sustainable development and low carbon emissions, China’s steel mills need to keep their steel capacity expansions under control, Mysteel Global learned from speakers at the 11th China International Steel Congress in Shanghai on May 27.
Lv Guixin, an official with China’s Ministry of Information and Technology (MIIT) suggested that reducing carbon emissions in China’s steel sector would be achieved by cutting steel output, increasing the proportion of EAF mills in steelmaking, and developing eco-friendly technologies including hydrogen metallurgy.
“Reducing crude steel output is the most important and efficient measure of the three,” he stressed, adding that China’s steel industry still faces great pressure from an oversupply of finished steel.
The more than 1 billion tonnes/year of crude steel was sufficient for China’s demand, he pointed out, adding that during the 14th Five-Year Plan period over 2021-2025, China can meet the domestic steel demand by adjusting steel imports and exports. “Exports of low-value added steel products should be reduced, and imports of these products should be encouraged,” he said.
Beginning May 1, China’s finance ministry adjusted the trade taxes on some ferrous products and cancelled export tax rebates on most steel products to restrict exports of primary steel and encourage imports, as reported.
Lv told congress delegates that MIIT had drafted a new guideline governing steel capacity ‘swaps’ in China to take effect soon and which will contain – among other stricter requirements – higher old-for-new capacity swap ratios that steelmakers must meet should they want to install new facilities. This measure may encourage domestic steel mills to abandon their extensive development mode whose core is to increase production volume, and instead strive to achieve the carbon peak for the whole industry by 2030.
Lv called on domestic steel mills to take no newly-added steel capacity as their bottom line, saying that MIIT will cooperate with relevant government departments to impose restrictions on steel capacity and output, to organize the re-examination of earlier progress regarding steel capacity reduction, and build upon the achievements already gained.
He Wenbo, executive chairman of China Iron and Steel Association also stressed the importance of capacity control, warning delegates that China’s steel industry may face serious problems if domestic steel producers expand their capacity blindly. “For the time being, (China’s) steel supply and demand is basically in balance, and the current (steel) capacity can meet the demand in the coming term,” he maintained.
In 2020, China’s crude steel output had reached 1.07 billion, up 7% on year, and the apparent steel consumption grew by 9% on year to 1.05 billion last year, as reported.
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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