China last year came out with mandatory output cut measures, a short-term but effective solution to control emissions.
Steel output cuts will prevent the steel industry’s carbon emissions from rebounding while developing high-end steel products.
Meanwhile, China’s urbanization is seen almost reaching saturation levels, and steel demand has plateaued. This could assist China’s efforts to reduce its steel production, some market participants said. They expected China’s crude steel output to hover from 900 million mt/year to 1 billion mt/year for the next few years, before production starts coming down.
Before any decarbonization technology reaches a scale at which costs could drive costs down, China’s steel output controls could be the only cost-effective way to rein in carbon emissions.