Beijing has set sights on the steel industry as part of its attempts to reduce carbon emissions and reach net-zero by 2060. (New York Times) Reuters reported earlier this year that China has pledged to ensure that its crude steel output decreases in 2021. As of July 2021 the nation’s crude steel output is down 5.6%. (Reuters)
Pundits are skeptical on if this is possible. In an email to CNBC on Thursday, lead metals analyst at S&P Global Platts, Paul Bartholomew states, “It would involve a real slamming on of the brakes to get that down,” He went on to say, “We think steel output will be up around 8-9% this year.”.
It will be “virtually impossible” for China to produce less steel this year compared to last year, Rohan Kendall, head of iron ore research at Wood Mackenzie, said at the Singapore Iron Ore Forum. (CNBC)
The Chinese views on this mandate are in stark contrast, however. They believe that steel mills are obliged to abide by government policy; especially the state-owned mills. “We have no choice (but) to obey the government’s rules,” Mu Guoqiang, head of steel import and export at Hesteel, said at the Fastmarkets’ Singapore Steel Forum. (CNBC)
This is a developing story that we shall keep a close eye on moving into the future; as it has major impacts on the economy as well as the environment.
The steel sector is one of the biggest polluters in China, producing around 10% to 20% of carbon emissions in the country.