STEEL NEWS

China's climate targets mean higher quality raw materials for steel

China, the world's leading steel producer, is seeing declining demand for steelmaking raw materials such as iron ore and coking coal, but of higher quality to meet its climate protection commitments, government consultants and industry officials said Friday. associations.

Beijing has pledged to peak carbon emissions by 2030 and neutral by 2060, challenging the iron and steel industry, which accounts for about 15% of the country's total greenhouse gas emissions. The climate target will lead to a drop in demand for them. “Iron ore is a key ingredient for steelmaking,” said Li Xinchuan, chairman of the China Metallurgical Planning and Research Institute.

China's crude steel production fell for four consecutive months amid Beijing's pollutant and carbon emissions cut, which saw iron ore imports fall and iron ore prices halved from a mid-May record.

“Our dependence on imported iron ore fell to 75.7% in the first nine months of 2021 from over 80%, which is difficult to achieve,” Li said at an industry online conference.

Nonetheless, Lee expects demand for high-quality iron ore to gradually increase with increasing environmental restrictions, demand for low-carbon products and an increase in the number of blast furnaces in the factories.

Coking coal consumption will also decline in the medium to long term, said Cui Pijiang, chairman of the China Coke Industry Association, adding that the resource supply should be "relatively stable."

Meanwhile, the supply of scrap steel is expected to rise in the coming years, an alternative feedstock for iron ore, but with much lower carbon emissions and cleaner.

The scrap steel utilization rate in China will rise to 30% by 2025 from the current level of 22%, said Li Shubing, a spokesman for the Scrap Steel Association.