The Chinese government raised the replacement ratio for new capacity to 1 to 1.5 from 1 to 1.25. Which means the amount of old capacity to be closed will now be 1.5 tonnes for every tonne of new, green, low emission capacity added.
This is aimed at reducing older steel capacity while at the same time to promote environmentally-friendly steel production and industry integration via mergers and acquisitions.
So the question being asked if whether Baowu will be both a consolidator and a rationaliser of existing capacity.What, then, does this mean for Australia’s iron ore exporters – Rio, BHP and Fortescue and the smaller operators?
Well, if productive capacity starts reducing then demand for lower quality ore – 58% to start with – will fade quickly.Steel mills are now blending 62% ore with 65% (the price of 65% fines has fallen less than the 62% price in recent days) to lower costs.
Closing capacity and looking to make steel plants greener will raise demand for 65% ore (most of which comes from Brazil) and some 62% fines from Australia.“
https://www.*********.com.au/2021/02/05/blue-steel-whats-going-on-in-china/
Maybe we could do with an iron ore / steel / market / magnetite thread at some stage too? A lot of developments going on right now with green steel etc we don’t want to lose sight of them!
”
MGT General and Off Topic Chat, page-25
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