Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Baowu Steel Group has promised to slash crude steel production in H2 2021as part of the country’s commitment to reduce carbon emissions and annual steel production. The statement did not give an exact total annual target by year’s end. 


Given that steel production output has jumped 11.8pc in H1 2021 in China against the previous year-ago period, chairman of Baowu Steel Chen Derong said the mandate must be resolutely implemented. China’s government had promised no annual growth in crude steel production in 2021.


The company’s statement also added that growing internationally is vital to its existence and development, thereby pointing towards continued expansion via investments worldwide, especially, in South Asian economies, and the strategic pursuit for export opportunities. 


The Baowu Group produced 115mn mt in 2020 and is owned by China’s state-owned Assets Supervision and Administration Commission of the State Council. Baowu is working to restructure Shandong Iron & Steel, which gives it another 35mn mt of annual capacity total near 150mn mt.


Tangshan, China’s top steel hub, is extending steel curtailments to March 13, 2022. The city anticipates for pollution to drop by 40pc compared to the same period in 2021 in the period around the Winter Olympic games which launch February 4, 2022.


The region is also curbing carbon emissions by curbing the use of heavy vehicles, regulating the cement industry, and replacing more of the city’s transportation to clean fuels. 


Tangshan mills are forecast to reduce crude steel production by 12.4mn mt in 2021 after producing 144mn mt in 2020 while Hebei province is intending to slash 21.7mn mt in annual production also by year’s end. The reduction promise in crude steel has lowered iron ore prices.

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