China’s top steelmakers see strong demand in 2021, but slow shift to carbon neutrality

Name: Two sessions: How China's environmental policies are giving a boost to green industries
Uploaded: 2021-03-05T22:30:17.000Z
Duration: 3 min 26 s
Description: Two sessions: How China's environmental policies are giving a boost to green industries

Chinese steel producers remain bullish about domestic demand this year, but have expressed concern about high iron ore prices

The transition to greener methods of production is likely to take a back seat to consolidation of steel mills, steel producers say

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Chinese steel producers remain bullish about domestic demand this year and expect the positive outlook to bode well for iron ore miners. Photo: AFP

Su-Lin Tanin Hong KongandAmanda Leein Beijing

Published: 6:30am, 6 Mar 2021Updated: 8:01am, 6 Mar 2021

Demand for steel in China will remain buoyant this year amid a steady pipeline of infrastructure projects, while long-term plans to curb production to meet carbon emissions targets are expected to proceed slowly, Chinese steel producers say.

Ahead of the National People’s Congress in Beijing on Friday, congress deputies and heads of some of the biggest steel mills in China, including Hunan Valin Iron and Steel Group and Xinyu Iron & Steel, said a decline in output to curb pollution was unlikely to kick in quickly, according to an interview with the state-backed China Economic Times.

Chinese steel mills face pressure to shift to greener methods of production in the next 10 years, after Beijing committed to reducing its carbon dioxide emissions by at least 65 per cent from 2005 levels by 2030 and to be carbon neutral by 2060.

In the interim, steel producers remain bullish about domestic demand, and expect the positive outlook to bode well for iron ore miners. But they have expressed concerns about the high price of iron ore, which was US$178 a tonne on Friday after cooling to below US$150 last month.

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Two sessions: How China's environmental policies are giving a boost to green industries

The high prices saw the Chinese steel industry call a meeting with Anglo-Australian iron ore miners Rio Tinto and BHP late last year.

“On the one hand, the price of raw materials has been strong – the price of iron ore has been around US$170 per ton since the start of the year – but on the other, demand for steel remains strong,” Xia Wenyong, chairman for Xinyu Iron & Steel, said in the interview on Thursday.

“Downstream customers have very full export orders with a large number of mechanical and electrical and home appliances due to be exported.”