1. China's Steel Industry Consolidation Accelerates

China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) approved on 9 Nov, 2022 that China Baowu Steel Group to acquire 51% of the shares in the largest steel producer in South China’s Jiangxi province – XinSteel for free. The move once again shows the company efforts to implement its strategic objectives after the restructuring of Maanshan Iron and Steel company in 2019 and the restructuring of Taiyuan Iron and Steel in 2020.

Meanwhile, the strategic restructuring of Sinosteel Group Corporation Limited and China Baowu Steel Group Corporation was approved SASAC on 21 Dec, 2022, revealing that the Baowu Group to fully hold the Sinosteel Group.

Driven by China’s supply-side structural reform and the State-owned-enterprises Reform, the work of restructuring and merger constantly processes in China’ steel industry, which also accelerate its consolidation.

The country considers that the restructuring and merger will help its steelmakers to complement each other's strengths and become bigger and stronger under the challenges traditional Chinese steelmakers facing amid the country’s targets to get carbon peak and carbon neutrality.

2. China Mineral Resources Group Established to Improve China’s Mineral Resources Supply Ability

The state-owned China Mineral Resources Group (中国矿产资源集团有限公司) was establised in Xiong'an New District on 25 July, 2022. Meanwhile, Yao Lin, the chairman of Aluminum Corp. of China and Guo Bin, executive vice president of China Baowu Steel Group Co leads the new group. The group targets to make good use of domestic and overseas market to improve the supply ability of China’s key mineral resources and ensure the stability of the industry and supply chain.

The Chinese government detailed the strategic meanings of the group’s establishment. First, the group will streamline the layout of China state-owned capital and resources distribution of related fields. Second, the group will help to complete the market consolidation, further increase industry concentrate ratio and boos market standard developments. Third, the group will improve its voice on the related industry and supply chain, gear up the stability of supply chain, secure the industry chain clear and strengthen the safety of industry and economy.

3. China to Continue Curbing Its Crude Steel Production, Reflecting Two Years’ Output Drop

China proposed cutting its crude steel output in 2021 for the first time. Official figures showed that China’s crude steel output decreased by 2.8% to 1.035 billion tonnes in 2021. Meanwhile, in 2022, Chinese government continued to implement the output reduction work, aiming to boost the country’s steel industry into high-quality development.

China’s crude steel output reduced by 1.4% y/o/y to 935 million tonnes in the first eleven months of this year. And the figure would be around 1.02 billion tonnes in the whole year, with the annual decrement at 1.4% y/o/y.

4. CISA Published a Roadmap for Realizing Net-zero Carbon Emissions for the China’s Steel Sector

The Steel Industry Low-Carbon Promotion Committee, led by the state-affiliated China Iron and Steel Association (CISA), published a roadmap for realizing net-zero carbon emissions for the country’s steel sector during 15-16 August, 2022. The roadmap proposed a dual-carbon technology pathway for the iron and steel industry, such as raising system energy efficiency, cyclic utilization of resources, improving and innovating production procedures, upgrading the smelting process, as well as carbon capture, utilization, and storage (CCUS) technologies.

According to the roadmap, the iron and steel industry will peak carbon emissions by 2030, achieve deep carbon reduction by 2030-2040 through innovation, break carbon reduction limits by 2040-2050 from key breakthroughs, and realize carbon neutrality by 2050-2060 from integrated development.

Meanwhile, the roadmap proposed five key requirements, which are (a) Deepen supply-side reform; (b) Optimize technique process structure; (c) Develop low-carbon technique through innovation; (d) Build green and low-carbon industry chain; (e) Strengthen innovation cooperation with global low-carbon industry. 

5. 2021 China Metallurgical Price Yearbook Compiled by China’s Metallurgical Price Association and SteelHome

China’s Metallurgical Price Association, a branch of the Price Association of China, and SteelHome jointly compiled 2021 China Metallurgical Price Yearbook in 2022. The book is the first professional and comprehensive publication that reflects China metallurgical price changes and industry dynamics.

Based on the price data, the book also covers China’s steel industry polices, metallurgical products output and export figures, and the indicators on steel upstream & downstream industry.

6. China's Steel EPD Platform Makes Debut

A Chinese iron and steel industry's Environmental Product Declaration (EPD) platform was officially launched on 19 May in Beijing. The platform brings prime enterprises and organizations along the steel industrial chain together to promote the green, healthy and sustainable development of the steel sector.

7. China Issues Guideline for High-quality Development of Iron and Steel Industry

Chinese authorities issued a c on promoting the high-quality development of the iron and steel industry, which specified that China’s iron and steel industry aims to basically form a high-quality development pattern featuring reasonable layout and structure, stable supply of resources, advanced technical equipment, high quality products and outstanding brands, high level of intelligentization, strong global competitiveness, as well as green, low-carbon, and sustainable development by 2025.

The guideline, which was jointly released by the Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC) and the Ministry of Ecology and Environment (MEE), pointed out that China intends to lift the numerical control rate of key processes of the metallurgical industry and the proportion of digital production equipment in the industry to about 80 percent and 55 percent, respectively, and build over 30 smart factories by 2025, which is expected to help the iron and steel industry move into the fast lane of intelligent development.

8. China to Boost Steel Construction Industry Healty Development

China’s steel construction industry manufacturing working committee was set up on 2 August 2022 in Beijing, with representatives from five China’s official associations such as China Iron and Steel Association (CISA), China Real Estate Association, China Steel Construction Society, China Construction Metal Structure Association and China Association of Building Energy Efficiency.

China has issued a series of official documents for the country’s green development, and all these documents clearly point out the requirement of popularize new construction types of steel construction fabricated building and steel construction housing.

China’ steel construction processing volume achieved 97 million tonnes in 2021, official data released by China Steel Construction Society. The figure surpassed a majority of country’s crude steel output. Meanwhile, China’ steel construction processing volume has kept rising significantly, showing the bright prospect.

9. China Cornerstone Plan Proposed for Improving Power on Supply and Pricing Ability

China Iron and Steel Association launched a cornerstone plan this year to hike iron ore production to 370 million tonnes by 2025, which is 100 million tons more than in 2020, Vice Chairman Luo Tiejun said.

China "cornerstone plan" starts with the three main sources of iron resources, and three timeline nodes of guarantee objectives (2025, 2030 and 2035), the two-level promotion system (national management level and key regions management level), and two types of implementation subjects (steel enterprises and specialized mineral resources enterprise groups).

The plan aims to strengthen the country’s power on iron ore supply and pricing ability.

China Cornerstone Plan

10. China Steel Industry to Fully Improve Extreme Energy Efficiency

Extreme energy efficiency project is the third major transformation projects in China steel industry which follows from capacity swaps and ultra-low emission project. Meanwhile, a key approach to reduce carbon emission and achieve carbon peak and neutrality in steel industry is to improve the extreme energy efficiency, and it is a great way to help the steelmakers to achieve green development.

“China will foster demonstrate steel plants with excellent energy efficiency, striving to achieve steel production with benchmark energy efficiency levels of 80-100 million tonnes in 2023, 150-200 million tonnes in 2024 and 200-300 million tonnes in 2025, said He Wenbo, Chairman of China Iron and Steel Association.