China’s Green Steel Transition: Hurdles And Opportunities
China's steel sector is behind on its environmental targets. This shortfall reflects EAF production challenges facing Chinese steelmakers.
Over the near term, a reduction in steel produced by high-carbon emitting blast furnaces is the most realistic path for China to approach its 2025 green steel targets. This bodes ill for iron ore demand and prices over the coming year.
On a longer-term basis, the challenges that are currently limiting green steel output would need to be addressed for China to meet its 2030 environmental targets. As and when the sector overcomes these limitations, the green steel transition will boost demand for steel scrap and high-grade iron ore at the expense of low-grade iron ore.
BCA Research | FICC
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