Original title: Iron ore prices are rising or near the end of the “dual carbon” target under the pressure of the steel industry to reduce emissions
[ 2020年我国粗钢产量占全球粗钢产量的57%，碳排放量占全球钢铁碳排放总量的60%以上。 ]
Since the beginning of this year, the rise in commodity prices has aroused great concern at the policy level. Regulatory authorities have successively taken measures to control the prices of iron ore, steel, copper and other commodities. The agency expects that this round of commodity price increases should be nearing an end.
In the context of achieving the carbon peak and carbon neutral goals, as the industry with the largest carbon emissions among the 31 manufacturing sectors, the steel industry is under great pressure to reduce emissions.
Xu Kuangdi, the former president of the Chinese Academy of Engineering, suggested at a symposium held by the China Iron and Steel Association on June 21 that it will take a certain amount of time to resolve the constraints. Reach the peak before the deadline and don’t do one size fits all. At the same time, pay attention to the formation of a benefit-sharing mechanism and accelerate the promotion of low-carbon and zero-carbon new technologies.
Responding to iron ore price increases
On June 21, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration for Market Supervision went to the Beijing Iron Ore Trading Center to conduct a survey to learn more about the iron ore trading and price changes since this year, and held a special symposium to conduct research. Good for iron ore and other bulk commodities to ensure the supply and price stabilization work.
The meeting pointed out that the price of iron ore has risen sharply and continues to operate at a high level, which has increased the pressure on the production and operation of mid- and downstream enterprises, and has attracted great attention from all aspects of society. The state supports the healthy development of iron ore spot trading platforms and encourages relevant market entities to trade in compliance with laws and regulations. At the same time, they will pay close attention to changes in spot trading prices, investigate abnormal transactions and malicious speculation in a timely manner, and implement monopoly agreements, disseminate price increase information, and drive up Behaviors such as price and hoarding will be severely punished and exposed publicly in accordance with the law to maintain a good market order.
Since the beginning of February this year, the prices of bulk commodities have continued to rise on the basis of last year. The increase has been particularly rapid from mid-April to early May; in early and mid-May, bulk commodities such as steel, iron ore, copper, and aluminum all hit historical records. The price is high.
Regarding the reasons for this round of iron ore price increases, Galaxy Futures analyzed that the global economic recovery has significantly increased the demand for steel, which has driven the demand and price of iron ore. There is a structural shortage of high-grade iron ore in Chinese port stocks. Driven by high profits, steel mills are more willing to purchase high-grade iron ore in order to rapidly increase production, which has further exacerbated this contradiction. In addition, affected by the epidemic, the growth of non-mainstream mines has been slow.
my country’s steel industry has a huge demand for iron ore. Once the price of iron ore rises, it will drive up the cost of steel production, and the price of steel will also rise as a result. It is dependent on my country’s infrastructure, high-end equipment manufacturing, automobiles and other industries that rely heavily on steel. Will have a greater impact, and the cost of rising iron ore prices will be passed on to these industries.
National Development and Reform Commission spokesperson Meng Wei said at a press conference on June 17 that in recent months, the prices of some commodities have risen significantly, and the increase has clearly deviated from the fundamentals of supply and demand, and has exceeded the reasonable range of recovery. In response to this phenomenon, the Development and Reform Commission and relevant departments acted swiftly and took multiple measures simultaneously, and achieved initial results.
For example, implementing policies such as raising export tariffs on certain steel products, urging key coal companies to increase production and supply under the premise of ensuring safety, restraining the blind launch of “two highs” projects, and conducting “look back” inspections on steel reduction. In addition, it carried out bulk commodity market supervision, jointly investigated market transactions, interviewed key industry enterprises and associations, investigated and verified clues related to suspected market manipulation and price drive up issues, and urged relevant market entities to operate in compliance with laws and regulations.
Meng Wei pointed out that through a series of measures, from the current situation, the market speculation has begun to cool down, and the prices of some commodities, such as iron ore, steel, and copper, have fallen to varying degrees.
Wang Guoqing, director of the Lange Steel Research Center, said that with the continuous introduction of domestic supply and price stabilization policies, coupled with the off-season for steel, copper and other metals demand from June to August, the Fed’s policy may be tightened ahead of time and the US dollar index will rise. Commodity prices are under pressure. From the perspective of the global economic situation, the impact of the new crown pneumonia epidemic on the supply of iron ore and copper will gradually weaken. Coupled with the weakening of the demand margin in the summer, the subsequent prices of bulk commodities such as iron ore and copper will fluctuate and weaken.
Zhongtai SecuritiesIt is pointed out that in the near future, the State Council will make arrangements to ensure the supply and price stabilization of bulk commodities, especially for domestically priced steel, coal and other varieties, and steel prices have also “fallen back” at a relatively high level. It is expected that the current round of bulk commodity price increases should be nearing an end. In the follow-up, we need to pay close attention to the drag on the profit growth of the upstream industry due to the slowdown in price growth.
The task of reducing emissions in the steel industry is arduous
In addition to rising prices of raw materials such as iron ore, another problem currently facing the steel industry is the arduous task of reducing carbon emissions.
The steel industry is the industry with the largest carbon emissions among the 31 manufacturing sectors. In 2020, my country’s crude steel production will account for 57% of global crude steel production, and its carbon emissions will account for more than 60% of global steel carbon emissions, accounting for national carbon emissions. About 15% of the total amount is one of the important manufacturing industries related to the carbon peak goal and the realization of the carbon neutral vision.
A report issued by the Low-Carbon Development Research Center of the Metallurgical Industry Planning and Research Institute pointed out that in the face of the country’s peak carbon emissions in 2030 and carbon neutrality targets in 2060, the iron and steel industry is under great pressure to reduce emissions and will face carbon emissions intensity in the future. “Relative constraints”, “absolute constraints” on total carbon emissions, and severe challenges to the “carbon economy”.
At the above-mentioned symposium held by the China Iron and Steel Association, Xu Kuangdi said that China’s steel industry is currently at the forefront of its counterparts in the world in terms of ultra-low emission transformation to achieve green development, with some scenic and garden-style factories appearing; but It is necessary to fully take into account that my country’s per capita crude steel stock is not large, crude steel output will remain at a high level for a period of time in the future, and long-process production of crude steel will account for a relatively high proportion of factors. In terms of technological development, although a number of low-carbon and zero-carbon metallurgical technologies such as hydrogen metallurgy have begun to enter the stage of industrial trial production, we must also see the impact of such technology maturity, economics and other constraints, and the solution of these constraints requires A certain amount of time.
Regarding the specific operations of achieving carbon peaking and carbon neutrality, Xu Kuangdi said that first, we must closely follow the goal decomposition task, strengthen the top-level design, set scientific goals, and formulate action plans. Some enterprises can advance appropriately according to their own development strategies, and some enterprises should also be allowed to reach the peak before the deadline, and not to make a one-size-fits-all approach. Second, we must adhere to the problem orientation, find common technologies, key technologies, and neck-in technologies that affect green and low-carbon development, organize industry forces and related forces to jointly tackle key problems, and at the same time pay attention to the formation of a benefit-sharing mechanism to accelerate low-carbon, zero-carbon new technologies The speed of promotion. The third is to pay attention to the establishment of a green and low-carbon standard system, which can be promoted to international counterparts, so that we can form a standard lead on the basis of technology leadership.
Li Xinchuang, director of the Metallurgical Industry Planning and Research Institute, said that the most effective measures for the steel industry to achieve carbon peaks and carbon neutrality are energy conservation and energy efficiency. Steel plants are also power plants. At present, the proportion of iron and steel enterprises using waste heat to generate electricity is 53%, which can be increased to 60% and 70% in the future. Through digitalization and intelligence, there is still potential for improvement in transportation efficiency.
It is understood that the main ways for iron and steel companies to reduce carbon include reducing steel output, transitioning from long blast furnace processes to short electric furnace processes, developing low-carbon smelting processes, developing clean energy, implementing energy-saving transformations, and developing carbon capture, utilization and storage technologies.
At present, major steel companies have released targets and roadmaps. For example, China Baowu announced that it will release a low-carbon metallurgical roadmap in 2021, strive to achieve carbon peaks in 2023, have the ability to reduce carbon by 30% in 2025, strive to reduce carbon by 30% in 2035, and strive to achieve carbon neutrality in 2050. . HBIS is scheduled to release a low-carbon metallurgy roadmap in 2021, achieve carbon peak in 2022, and achieve carbon neutrality in 2050.
Ansteel Group promises to release a low-carbon metallurgical roadmap at the end of 2021, and achieve a peak carbon emissions by 2025; achieve a breakthrough in the industrialization of cutting-edge low-carbon metallurgical technology in 2030, promote and apply deep carbon reduction technology on a large scale, and strive for carbon emissions by 2035 The total amount is reduced by 30% from the peak value; the continuous development of low-carbon metallurgical technology has become the first batch of large-scale steel enterprises in my country’s steel industry to achieve carbon neutrality.
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Editor in charge: Li Siyang
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