China’s steel production increased 50pc, while the number of steemakers reduced by half over the past decade as the country strengthened its emission guidelines. The industry’s sulfur dioxide emissions have been reduced by 54pc during the period, according to official data.
Provincial authorities in China have consistently pushed China’s largely fragmented steel industry to consolidate, transfer and upgrade their facilities. China Iron and Steel Association (CISA) has advocated the merge of smaller enterprises with large steelmakers in consolidate capacity and adopt greener technologies like electric-arc furnaces (EAFs) over blast furnaces (BFs) and meet stringent emission norms being put in place.
Steel prices in China
In March, steel rebar prices fell to around CNY3,580/mt ($506.57) from CNY3,680/mt($520.72) in January, as demand dropped due to Covid-19 related global shutdown. However, since China majorly operates BFs, it continued to produce at the same or reduced levels as shutting down a BFs is a long process, which is not the case with EAFs. Thus the issue of overproduction and inventory pile up can be avoided with the operation of EAFs and they also facilitate better utilization of metal scrap. After a slump, rebar prices have gradually picked up in June to CNY3,614/mt ($511.30) as operations have normalised across the globe.
($1 = CNY7.07)