224
L. Ren et al.
BOF steel accounting for 88.4%. 108 Mt were produced by short process, i.e. EAF
steel making up 11.6%, as illustrated. Compared with the other top 10 crude steel
producers such as Italy (EAF at 81.57%), US (EAF at 68.01%) and India (EAF at
54.78%), China ranks the lowest in short process steelmaking which is mainly used
for high-end steel products for special purposes. Studies show that 2–2.15 tons of
CO 2 will be released per ton of steel by BF-BOF while only 0.5 tons will be emitted
by EAF. Objectively speaking, the low proportion of short process steel is a major
contributor to the high energy consumption and carbon emission by China’s iron
and steel industry, and some scholars are calling for the shift from long process to
short process steelmaking. However, the small share of short process in China has
its realistic reasons, and it would be next to impossible to replace the long process
directly by short process to align with developed countries in term of the share of
EAF:
(1) High power cost making it difficult to reduce the cost of short process
steelmaking;
(2) Short process steelmaking in China is not state of the art, with prevailing
challenges such as high-power consumption;
(3) Iron and steel recycling and reusing is under developing in China;
(4) Iron and steel stock per capita is still growing in China while massive retirement
of steel product has not taken place. The supply of scrap is limited in proportion
of new demand for steel;
(5) As a “world factory”, China has to meet the demand on products which are
made from steel for numerous countries, steel demand still keeps strong; in
other words, most of the long process steel plants which are able to produce
enough steel are located in China, making the situation much different from
Italy and other countries.;
Although it is unrealistic to build short process steelmaking facilities on a massive
scale and align the share of short process steel with Italy or US in the near future, the
following facts nonetheless provide reasons for optimism of its potential and value
in China:
(1) The risk of overcapacity and excessive inventory. The rapid growth in iron
and steel production/consumption in China indicates a surge in scrap in the
future. Besides, policies of rapid absorption at the demand side (such as accelerating infrastructure construction) to tackle overcapacity are still valid, which
stimulates iron and steel consumption but on the other hand increases risk of
scrap oversupply. The succession of incidents sweeping across the world in the
beginning of 2020 may shorten the market economic cycle and incur the risk
of shrinking economy, and a new round of policy and economic incentives is
likely to be applied in the global iron and steel industry, resulting in mounting
pressure of steel scrap disposal in 2030 up to 2050;
(2) The risk of industrial transfer and contraction of international trade. As is stated
above, China, known as “the world factory”, produces products made from
steel for multiple markets. However, the production cost in China may rise as
L. Ren et al.
BOF steel accounting for 88.4%. 108 Mt were produced by short process, i.e. EAF
steel making up 11.6%, as illustrated. Compared with the other top 10 crude steel
producers such as Italy (EAF at 81.57%), US (EAF at 68.01%) and India (EAF at
54.78%), China ranks the lowest in short process steelmaking which is mainly used
for high-end steel products for special purposes. Studies show that 2–2.15 tons of
CO 2 will be released per ton of steel by BF-BOF while only 0.5 tons will be emitted
by EAF. Objectively speaking, the low proportion of short process steel is a major
contributor to the high energy consumption and carbon emission by China’s iron
and steel industry, and some scholars are calling for the shift from long process to
short process steelmaking. However, the small share of short process in China has
its realistic reasons, and it would be next to impossible to replace the long process
directly by short process to align with developed countries in term of the share of
EAF:
(1) High power cost making it difficult to reduce the cost of short process
steelmaking;
(2) Short process steelmaking in China is not state of the art, with prevailing
challenges such as high-power consumption;
(3) Iron and steel recycling and reusing is under developing in China;
(4) Iron and steel stock per capita is still growing in China while massive retirement
of steel product has not taken place. The supply of scrap is limited in proportion
of new demand for steel;
(5) As a “world factory”, China has to meet the demand on products which are
made from steel for numerous countries, steel demand still keeps strong; in
other words, most of the long process steel plants which are able to produce
enough steel are located in China, making the situation much different from
Italy and other countries.;
Although it is unrealistic to build short process steelmaking facilities on a massive
scale and align the share of short process steel with Italy or US in the near future, the
following facts nonetheless provide reasons for optimism of its potential and value
in China:
(1) The risk of overcapacity and excessive inventory. The rapid growth in iron
and steel production/consumption in China indicates a surge in scrap in the
future. Besides, policies of rapid absorption at the demand side (such as accelerating infrastructure construction) to tackle overcapacity are still valid, which
stimulates iron and steel consumption but on the other hand increases risk of
scrap oversupply. The succession of incidents sweeping across the world in the
beginning of 2020 may shorten the market economic cycle and incur the risk
of shrinking economy, and a new round of policy and economic incentives is
likely to be applied in the global iron and steel industry, resulting in mounting
pressure of steel scrap disposal in 2030 up to 2050;
(2) The risk of industrial transfer and contraction of international trade. As is stated
above, China, known as “the world factory”, produces products made from
steel for multiple markets. However, the production cost in China may rise as