Posted on 31 May 2021
China’s determination to control steelmaking capacity and crude steel output to reduce its carbon footprint and its reliance on overseas iron ore will see the importation of semi-finished steel become a new rising trend, according to Qi Bin, market research department vice director of the China Iron & Steel Association (CISA).
Addressing over 160 industry representatives at Mysteel’s 2021 Steel Semis Imports Training in Shanghai on May 28, Qi said that China’s commitment to the environment does not allow for more rises in steelmaking capacity. With the country’s goal to reach peak carbon by 2030, controlling of carbon emissions will become mandatory for the industry’s future development, he warned.
Besides, Qi noted that with most of the world’s iron ore being held in the hands of a few countries, constraints on supplies present great risks to the smooth development of China’s steel industry. “This is the most evident bottleneck,” he said.
He noted that China’s recent cancellation of steel export rebates and the removal of import taxes on commodities including pig iron and semi-finished steel since May 1 are measures to reduce its reliance on iron ore imports and to conserve more ferrous elements within the country.
Other speakers at the training echoed Qi’s views, with a few officials from domestic steel mills disclosing that they are already engaging more in this business (of sourcing foreign semis), though their views on the possible size of this new trend were varied.
Shagang Group, a leading privately-owned steel producer based in East China’s Jiangsu province, imported over 2 million tonnes steel semis, including billets and slabs in 2020, according to Duan Zhibai, general manager of Shagang’s European subsidiary.
“China’s imports of steel semis will absolutely be a long-term trend, but the volumes will not be stable or fixed,” Duan maintained. “It will largely depend on the price disparity between China and overseas (semi-finished steel) suppliers,” he said during the panel discussion.
Yet, other delegates were more hopeful, believing that the room for growth in steel semis’ imports to be very large.
Wang Jianhua, Mysteel’s chief analyst, pointed out during the panel session that China’s emphasis on carbon emissions reduction will come with additional costs for industry members, through the introduction of new equipment and the adoption of new technology and processes. “The domestic steel mills’ costs in this aspect will definitely increase, which will be reflected in steel prices, with the result that in the future, (Chinese) production costs could very likely to be above some of the other countries whose environmental protection costs are lower,” he noted. “This further raises the possibility of strong billet imports.”
Over January-April, China’s steels semis imports totaled 3.2 million tonnes, up 45.6% on year, as Mysteel Global reported.
Source:Mysteel Global
