China’s Emissions Control & Steel Industry

Steel industry is a high polluting industry. It’s defined as a very key factor for China’s environmental problem. So, China government has issued several policies to control the steel industry pollution. 

An environmental clamp down on high polluting Chinese steel mills will neither curb growth in domestic steel production or cut seaborne iron ore import which are predicted to rise by a further 90 MT in 2014 to a record 921 MT.

Steel mills in some Chinese regions have been told to slash capacity as well as idle coke batteries and sintering operations as part of push to cut emissions that are viewed as a source of toxic smog enveloping Beijing and Shanghai.

But Wood Mackenzie said there is plenty of unused capacity within China’s steel industry ready to replace any lost production due to shut downs resulting from harsher emissions controls.

The iron market is understandably spooked by the introduction of environmental controls and their potential financial impact on the steel industry and this has caused price volatility will prices plunging to 17 month lows in recent weeks, before picking up again recently.

However during the remainder of 2014, we expect that fighting emissions will have negligible impact on total Chinese crude steel production and limited impact on iron ore demand in terms of quantity.

Source – steelguru.com