China: Power curbs to cut Jiangsu steel output by 3 mn t in short term

With the ongoing power cuts in China's Jiangsu province, it is expected that steel production will remain impacted. This, in turn, will reduce scrap demand, which will be difficult to fully recover before October 7. This will reduce the supply of steel by about 3 million tonnes. This observation came up at a symposium held jointly on 26 Sept'21 by the Jiangsu Provincial Iron and Steel Industry Association and the Provincial Iron and Steel Service Industry Association. The conference explored the supply and demand dynamics of the Chinese steel market.

Although this 3 mn t supply reduction is not enough to cause market shortages in the short term, it has severely impacted normal production schedule and order books, it was revealed at the conference.

Several high-level officials attended the conference, including Chen Da, President of the Provincial Iron and Steel Service Association.

Participants analysed and evaluated the impact of Jiangsu's "dual control" of energy consumption on steel producers, as per the Jiangsu Iron and Steel Industry Association.

The dual control involves a clear alert level on the energy consumption intensity and supply amount reduction.

Participants felt that the dual control of energy consumption will help to greatly improve the efficiency of energy use, and it is also forcing a rethink and re-adjustment of the industrial energy consumption rate and structure.

This round of double-controlled steel production in the province of Jiangsu has impacted 70% of the industrial area. Jiangsu is the second-largest province in China, contributing over 10% of China's total crude steel production. This region has numerous electric arc furnaces (EAFs).

Outlook
The symposium agreed that, in the long run, the mills should be guided by a more reasonable allocation of energy resources, a substantial increase in energy yield and energy efficiency. There should be an emphasis on reducing energy consumption, and there is a need for a more market-oriented control measures. More use of technology for energy saving is the need of the hour. Energy-saving methods should be adopted to control the "two highs" (highly polluting industries and high energy consumption). Steel is one such industry.