Latest news with #steelmakers
Reuters
29-05-2025
- Business
- Reuters
Green steel is distant and expensive, but teal steel is coming: Russell
SINGAPORE, May 29 (Reuters) - There is a conundrum in plans to decarbonise the steel sector. It's entirely feasible with current technologies, but also wholly unlikely because of the massive cost of deploying them. The steel chain from iron ore mining through to finished products accounts for about 8% of global carbon emissions, and reducing this impact is often viewed as vital to combating climate change. If there was a consensus at the gathering of the iron ore and steel industry this week at the Singapore International Ferrous Week, it's that cutting emissions from steel-making is entirely possible. But what was also obvious is that while miners and steel makers are in the early stages of transitioning, the process will be slow and massively expensive. The major problem with this is nobody is sure who is going to pay. Australia's iron ore miners, who supply about two-thirds of China's imports, are capable of building a green iron supply chain, which would use solar and wind energy to create green hydrogen, which would then be used to beneficiate iron ore into direct reduced iron (DRI) and hot-briquetted iron (HBI). Using HBI cuts out about 80% of the emissions created in the entire steel-making process by eliminating the current practice of using coal to turn iron ore into pig, or crude, iron by removing oxygen and other impurities. But the iron ore miners won't invest the billions of dollars needed to build green iron plants unless China, which makes about half of the world's steel, and other major producers such as South Korea, Japan and India, commit to using the cleaner product. At the heart of the problem is cost. Using hydrogen to make green iron and an EAF to turn that into steel can reduce the emissions from around 1.8 metric tons of carbon to as low as 200 kilograms per ton of steel. While estimates of the cost vary, the consensus is that even a green steel supply chain built at scale would result in a near doubling of the cost of making a ton of steel compared with the coal-intensive current method of using a blast furnace and a basic oxygen furnace (BF-BOF). It's likely that steel mills will be unwilling to see their costs rise so dramatically, as it would be challenging to pass the higher prices fully on to consumers. The current iron ore and steel market dynamics illustrate the scale of the challenge. Chinese steel mills are struggling for profitability, and one way they try to cut costs is to increase the share of low-grade, and cheaper, iron ore in their production. This lowers the cost of the steel produced, but also raises the carbon intensity to about 2.2 tons per ton of steel produced, up from about 1.8 tons if high-grade iron ore is used in the BF-BOF process. In other words, green steel ambition is likely to be sacrificed on the altar of economics. But it is possible to lower the carbon intensity of steel by going somewhat greener. Using natural gas to reduce the iron ore instead of coal could trim the amount of carbon to around 1.1 tons per ton of steel, and if the gas can be secured at a cheap enough price, this becomes a viable and economic option. Producing hydrogen using natural gas is often referred to as blue hydrogen, and using this fuel to beneficiate the iron ore means steel could be considered teal, one of the shades between blue and green. Brazil's Vale ( opens new tab is building what it calls mega-hubs in three Middle East countries with the aim of using cheap natural gas to produce DRI and HBI for export to steel mills in China. This product would also help steel producers comply with the European Union's planned Carbon Border Adjustment Mechanism, which is slated to be introduced next year, although it may be delayed. There are several points to note, firstly that while the 80 million tons of iron ore per annum that Vale is believed to be planning on processing in the Middle East sounds substantial, it's not even one month's worth of imports by China, which buys about three-quarters of global seaborne iron ore. Natural gas isn't a viable option for Australia's iron ore sector, as it is too expensive and the available supply in Western Australia, home to the bulk of iron ore mines, is already spoken for by the domestic sector and the liquefied natural gas producers. This means that teal steel will make a bit of difference, but not the step-change needed to decarbonise steel. That will require government legislation and regulation to incentivise or punish steel makers through measures such as subsidies or carbon taxes to the point where fully green steel becomes viable. Teal steel is an example of the cliché to not let perfect be the enemy of good. The views expressed here are those of the author, a columnist for Reuters.
CNA
28-05-2025
- Business
- CNA
Steel industry doubts China will enforce output cut plans
SINGAPORE: China says it wants to cut crude steel output this year but traders and steelmakers are betting Beijing won't follow through as industry profitability improves and trade tensions weigh on the economy. The world's largest steel producer in March unveiled plans to cut output and restructure its giant steel sector to address overcapacity which has long plagued the industry and is spilling over into export markets and angering trade partners. But at the flagship Singapore International Ferrous Week conference, conversations with fifteen traders, steelmakers, analysts and hedge funds all had the same message: the cuts are unlikely to be enforced. Profitability is improving across the industry driven by unexpectedly strong demand, undercutting some of the logic of reining in output in the first place, they said. In the year to April industry profits hit 16.9 billion yuan (US$2.35 billion), versus a loss of 22.2 billion yuan in the same period last year. Participants bet the turnaround will make Beijing less likely to crack down, especially as the trade war with the United States makes policymakers sensitive about maintaining economic growth. There's even less incentive for the local governments where many of these steel mills are an important contributor to the growth targets officials are assessed against. "When mills could make some money after grappling with survival in the past two years, no one has the motivation to slash output," said a manager from a medium-scale Chinese steelmaker on condition of anonymity.
Reuters
28-05-2025
- Business
- Reuters
Steel industry doubts China will enforce output cut plans
SINGAPORE, May 28 (Reuters) - China says it wants to cut crude steel output this year but traders and steelmakers are betting Beijing won't follow through as industry profitability improves and trade tensions weigh on the economy. The world's largest steel producer in March unveiled plans to cut output and restructure its giant steel sector to address overcapacity which has long plagued the industry and is spilling over into export markets and angering trade partners. But at the flagship Singapore International Ferrous Week conference, conversations with fifteen traders, steelmakers, analysts and hedge funds all had the same message: the cuts are unlikely to be enforced. Profitability is improving across the industry driven by unexpectedly strong demand, undercutting some of the logic of reining in output in the first place, they said. In the year to April industry profits hit 16.9 billion yuan, opens new tab ($2.35 billion), versus a loss, opens new tab of 22.2 billion yuan in the same period last year. Participants bet the turnaround will make Beijing less likely to crack down, especially as the trade war with the United States makes policymakers sensitive about maintaining economic growth. There's even less incentive for the local governments where many of these steel mills are an important contributor to the growth targets officials are assessed against. "When mills could make some money after grappling with survival in the past two years, no one has the motivation to slash output," said a manager from a medium-scale Chinese steelmaker on condition of anonymity. Chinese crude steel output rose 0.4% between January and April this year. In China, the absence of public orders from Beijing since the March announcement was a sign for many at the conference that the output cuts will be limited or only halfheartedly enforced. Chinese consultancy Fubao said in late April that while provincial targets for output cuts had been finalised, there were doubts about whether steel mills would actually follow through. "Some provincial governments will rely on steel to help with GDP," said Mengtian Jiang, chief ferrous metals analyst of Harizon Insights. "Steel mills are making money especially with domestic coking price having almost halved, so I do not see that China's steel output will be down much." Steel exports may fall 3%-4% this year, but that will not impact China's steel output much, she added. ($1 = 7.1976 Chinese yuan renminbi)
Bloomberg
28-05-2025
- Business
- Bloomberg
China Steel Woes Deepen as Rebar Prices Fall to Eight-Year Low
Prices of a key Chinese steel product used in construction were at their lowest since 2017 as the world's biggest market for the metal grappled with a massive glut. Reinforcement bar — or rebar for short — is a benchmark for China's traditional steel markets because it's used to strengthen concrete in buildings and infrastructure. The eight-year low in Shanghai highlights the demand struggle facing steelmakers due to a prolonged downturn in the country's property sector.
Reuters
27-05-2025
- Business
- Reuters
Brazil government renews tariffs, quotas on steel products
SAO PAULO, May 27 (Reuters) - Brazil's government on Tuesday decided to renew 25% tariffs initially imposed last year on 19 steel products, while also expanding the trade defense measure to other four, Brazil's Ministry of Development, Industry, Trade and Services said. The decision, which was made by government trade body Gecex/Camex, and will be valid for a further 12 months, also maintained a quota system on the volume of steel imports, the ministry said in a statement. Brazil had initially announced those trade defense measures in April last year, after steelmakers complained about cheap foreign steel, specially from China, "flooding" the local market. In the statement, which did not name the new products to be affected by the tariffs, the ministry said that steel imports made in the context of trade agreements or special regimes would not count toward the quota volumes.
