China wants to reduce steel production due to emissions

China wants to reduce its steel production due to the negative impact of production on the environment. However, experts believe that this may be a very difficult goal to achieve. According to the consulting company Wood Mackenzie, the country produced 12 percent more crude steel in the first half of this year than in the same period of 2020. In May 2021, the Asian power produced a record amount of steel, 99.45 million tons. A month later, China reduced production to 93.88 million tons, but experts still remain largely skeptical and do not believe much about the downward trend. The CNBC portal informed about it. The steel sector is one of the biggest polluters in China. It is estimated that it produces about 10 to 20 percent of the country's carbon emissions. The production of this commodity thus does not correspond to long-term plans in relation to climate protection. Some time ago, the country declared that it wanted to be carbon neutral by the end of 2060. According to analysts, steel production in China in the second half of this year is likely to be lower than in the first. Nevertheless, total steel production will hardly be lower than in 2020. "Steel production in China will increase by an estimated 8 to 9 percent this year," said Paul Bartholomew, an analyst at S&P Global Platts, for CNBC. "It will be virtually impossible for China to produce less steel this year than last year," confirmed estimates by analyst Rohan Kendall of consulting firm Wood Mackenzie. "There is currently a very strong demand for steel in the country and it is unlikely that production will fall in the coming months," confirms manager Zhuang Bin Jun of Fortescue Metals. However, according to the CEO of Hesteel, one of the largest steel companies in China, the approach of companies must change. The companies are committed to adhering to government policy in relation to the environment. "We have no choice but to follow government rules," Mu Guoqiang told CNBC. Steel mills in Changshan City, Hebei Province have reportedly reduced production. This happened after the Chinese authorities warned them against punishment if their production was higher than the binding Chinese limits. Analyst Rohan Kendall believes there is a solution. The country can reduce consumption, for example in the construction sector, where steel is widely used. This will slightly reduce the demand for it. Analyst Paul Bartholomew has a similar view, according to which China should focus primarily on reducing demand as a key factor in production. According to Erik Hedborg, chief analyst at CRU, demand for the commodity in the country could really fall in the second half of the year. "The construction industry is weakening slightly," he added. But they don't believe much if production falls below 2020 data. "We are skeptical about this," Hedborg concluded.