A question of time

 

Brian Taylor

 

Measured by output, the steelmaking industry in China has far surpassed the steel sectors in every other single nation. In the first half of 2014 China’s furnaces produced slightly more steel than mills in all other nations combined.

Unfortunately for the citizens of China, its mills also have surpassed every other nation in the amount of particles emitted into the air. The much reported smog problems in China emanate from a variety of sources, but metals production, including steel, has been identified as one contributor.

That China’s emissions have increased with soaring output should come as no surprise, and part of its problem stems simply from its high output. Beyond that, however, Chinese Ministry of Environment officials and steelmaking executives must certainly be looking at the predominance of basic oxygen furnace (BOF) steelmaking technologies in China compared to electric arc furnace (EAF) plants.

The dominance of BOF technology is no accident in China, and is based on the familiarity of steelmakers there with the process; access to iron ore in nearby regional markets; and a lack of ferrous scrap availability when China ramped up its output from 1990 to 2010.

However, the combination of a change in some of the above circumstances and pressure to reduce emissions may help prompt China’s steelmakers to begin investing in EAF steelmaking for any future projects.

China’s steel industry is considered by some of its own economic planners as being in an excess capacity situation, so a rush toward new EAF mills seems unlikely.

Nonetheless, the impact of smoggy air on the Chinese steel industry may be in its nascent stages. In March 2014 in the wake of heavy February smog, Chinese premier Li Keqiang declared a “war on pollution.”

Steel production in China currently involves several particle-emitting steps entailing iron ore sintering, the production of pig iron and the operation of large BOF plants.

There are many reasons EAF steelmaking gained market share in Europe and North America, including the availability of ferrous scrap as feedstock. Among them as well was the emission of fewer particles and the relatively less capital intensive process to further reduce emissions in the EAF process compared to BOF steelmaking.

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If or when China’s industry begins making this same shift, it will ultimately involve confidence in its ability to obtain ferrous scrap within its own borders. History also has shown, however, that during the ramp-up stage, ferrous scrap processors throughout the world will be taking part in a global market that will notice the difference.

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