CISA aims at increasing investments to meet China's steel raw material sufficiency

He Wenbo, executive chairman of the China Iron & Steel Association (CISA) and with decades of experience in China's steel industry by working in Baosteel and Minmetals, proposed a series of means to raise self-sufficiency in China's steelmaking raw materials when attending one of the Two Sessions in Beijing, according to CISA's sharings over March 4-9.

The higher self-sufficiency should be achieved via investments in the domestic and overseas iron ore mining projects and increasing scrap utilization in China's steelmaking, he agreed.

To quicken the pace, the related Chinese authorities should enhance coordination and efficiency among themselves to simplify the approval procedures for new domestic iron ore projects, to lower related taxes and fees, to provide financing support when needed, and to guide the investments towards the domestic resources with high grades, sizeable deposits and cost competitiveness.

As for overseas iron ore investments, related Chinese authorities should oversee the development to help enterprises minimise risks and identify potential gains on the one hand, and to provide policy and financing support whenever necessary on the other.

China's steel scrap industry, to develop, will need the government's guidance for higher concentration and nurturing leading enterprises as role models, and the industry's supply chain should be improved further to include collection, separation, processing, and logistics services, according to him. Besides, taxation in domestic steel scrap generation and steel scrap imports should also be reviewed and revised accordingly to encourage supplies.

Besides, the Chinese authorities should finalize concrete phased targets by 2025, 2030, and 2035 to systematically raise the self-sufficiency in steelmaking raw materials, he suggested.

As of now, Beijing targets to increase scrap utilization in steelmaking to 30% or at least 300 million tonnes by 2025, as reported.

In 2021, China produced 1.035 billion tonnes of crude steel, and it imported 1.124 billion tonnes of iron ore, produced 285 million tonnes of iron ore concentrates domestically, and used 230 million tonnes of steel scrap in steelmaking, He shared, and their contributions to the country's steel output were respectively at 61%, 16% and 20% last year, or varying marginally from 62%, 15% and 20% respectively for 2020, according to Luo Tiejun, a vice chairman of CISA.

Written by Hongmei Li, li.hongmei@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint