Crude steel production from China fell for the fifth straight month in November on government’s actions to cut production to clean up the environment in a bid to reach its carbon neutrality goal by 2060.
Weak steel demand in the construction sector, softness in domestic steel prices and power shortages also contributed to the decline.
Production in China, which accounts for nearly half of the global steel output, tumbled 22% year over year to 69.3 Mt in November. Output is also down from 71.6 Mt in October. Production slipped 2.6% year over year to 946.4 Mt in the first eleven months of 2021. China’s monthly steel output has been declining since July after hitting a record high of 99.5 Mt in May 2021.
Beijing has been pushing steel mills in the country since early July to implement output and capacity curbs to comply with the norms to cut carbon emissions. The steel sector is among the biggest sources of carbon emissions in China, accounting for roughly 15% of national carbon emissions. China has set a national goal to achieve peak carbon emissions for the steel sector by 2025.
China’s steel output is expected to continue to shrink through December due to mandatory production cuts. Output is also likely to be capped by softer steel demand in the country, partly resulting from a slowdown in demand in the construction sector. However, production is likely to rebound in first-quarter 2022 as steel mills in the country complete the required curtailments for 2021.