Analysis: China's crude steel production surged, booster hit a record high carbon dioxide emissions

On the analysis of the latest quarterly data show that China's carbon dioxide emissions from because of the "new champions" has been caused by a sudden and temporary decline in the rebound, and reached a new record high.

Earlier this year issued by the Chinese government aimed at boosting economic recovery after the "new champions" epidemic of stimulus policies, promote the sharp increase of crude steel production.

In the three months in July to September period, China's crude steel production increased by 10%.Steel industry is also an important source of carbon emissions.

Reported in many provinces of crude steel output far more than its capacity under the condition of control target, China is likely to miss 2020 steel "capacity" goal.

Steel control target

Steel control target in 2017, is the symbol of the Chinese leader xi jinping, puts forward the background of the structural reform of the "supply side" policy.The policyAimed atMake the economy out of its dependence on stimulus emerge in endlessly in the construction industry.

If you count the upstream coal and coking coal consumption, then the iron and steel industry should be the country's largest coal consumption industries.It is at the same time, the country's largest electricity consumption industry and the largest source of air pollutants, the government will therefore it as a main target of the rectification of improving air quality.

For a long time, the Chinese government to "capacity" objective response to other countries on China's market "dumping" of steel to the international marketcomplaint.

The key objectives of this set in 2017 of China's crude steel production capacity will be limited to "not more than one billion tons a year, well below the 2015 level of annual output of 1.13 billion tons.From 2015 to 2020, however, China's crude steel production increased by 30% in real terms, is expected to exceed one billion tons this year.This shows that steel production capacity is much higher than actual capacity "to" control target.

And capacity than the allowed maximum yield under the control target, "excess" crude steel output up to two hundred million tons, equivalent to 2.5 of the total output of the U.S. steel industry.In 2020, the Chinese steel industry "excess" emissions of carbon dioxide will reach three hundred million tons, roughly with Poland's total emissions.

China's ministry of steel production capacity, it issued a recentlyThe new policy documents.Is accompanied by the central government of the provinces after asking to return to work and production to carry out the "" in big Numbers game, relaxation capacity control of criticism.

Emissions growth

Last quarter, produced by the burning of fossil fuels and cement production of carbon dioxide emissions rebound quickly.1 to 4 months, related emissions dropped by about 8%;July to September, and increased 3% year on year.If at the end of January "new crown" blockade weeks-long antigovernment emissions than the growth rate is as high asAbout 25%.

The findings are based on official Chinese statistics data and the energy industry.The conclusions and published this week in the journal science progress based on the latest satellite data to estimateIn much the same way as.The study shows that after 4 months, China's carbon dioxide emissions has returned to before the outbreak of the "new champions" levels (the author published in the bulletin of the carbon in JuneconclusionHas been mentioned about this).

In the first quarter of 2015 to the fourth quarter of 2020, China's fossil fuel burning and cement production in three months the average carbon dioxide emissions.Data sources: the author USES the data of China's National Bureau of Statistics and Chinese customs official as wellWind info financial terminalThe data analysis of the energy industry.The chart used by the carbon bulletinHighchartsTo draw.

Latest quarterly data show that in metal industry, mainly iron and steel production, coal consumption rose by 6%, mainly cement production of building materials industry, increased by 10%.Basic flat, however, the coal consumption of the electric power industry, coal consumption and even other industries have declined.Overall, July to September, around China power coal consumption grew 1% year on year.

Data also showed that cement output increased 5% year on year, oil demand increased 3%, gas demand has increased by 4%.If the electricity consumption growth in both steel and cement industries, then two-thirds of the country's new carbon emissions come from these two industries.

Control of steel production capacity

As early as in 2017, is responsible for resolving excess steel production capacity of the ministry was releasedThe steel industry adjust upgrade planning (2016-2020)".

The programme had predicted that in 2020, domestic consumption of crude steel is 650 million to 700 million tons, less than 2013 tonnes in 760 million.Set the plan up to steel production capacity from 1.13 billion tons in 2015 control to 2020 "one billion tons the following" goal.The plan to 2020 crude steel production is limited to 750 million tons to 800 million tons (due to the consideration of export demand, the domestic consumption of crude steel more than expected one hundred million tons), slightly less than 2015 tonnes in 804 million.

China did not report the crude steel production capacity of the country's system, but by large steel enterprises report to report the production at the same time the "black metal industry capacity utilization on average" (hereinafter referred to as the "capacity").The so-called "capacity", refers to the ratio of accounts for actual production capacity.We can thus calculated roughly two period of existing capacity.

China's crude steel production, capacity control goal and the actual capacity estimates (unit: one million tons/year).Data sources: crude steelproductionAnd black metal industrial capacityutilizationData from the National Bureau of Statistics, capacity value calculated from the author;Ten months before the 2020 data from the data calculated.The chart used by the carbon bulletinHighchartsTo draw.

In 2016 and 2017, with the creation of a new target, crude steel production capacity.During this period, crude steel production growth, small report utilization rate is higher than production, this means that the smooth implementation of "capacity".

In 2018, however, crude steel production began to surge, the increase of capacity utilization is much higher than reported.This suggests that the iron and steel enterprises may have cleverly circumvent government controls, new capacity have been built.Reported capacity and production capacity by 2020, the difference between the control target to further expand, up to two hundred million tons.

Even assuming capacity utilization rate is very high, the industry of the current of carbon dioxide emissions than capacity control target under the allowed maximum emissions more than three hundred million tons.

China's steel production "carbon emissions" in crude steel production for cardinality estimate.Capacity under the control target of "the" largest emissions scenario is in default 85% high efficiency of calculation.Data sources: the author USES the National Bureau of Statistics, China coal industry association reported the average energy consumption of per ton steel and comprehensive dataMedia reportsThe calculation.The chart used by the carbon bulletinHighchartsTo draw.

Expansion at the provincial level

Hebei province is located in Beijing, a heavy industry province, is the primary focus control of air pollution in China.The province's first "capacity" measures, promised in 2016 a third of the "capacity" goal, and the total output of steel can be cut to nearly three hundred million tons from 2016 2020 tonnes in two hundred million.

Hebei, however, this year's crude steel output will reach a record 250 million tons, more than 2015 tonnes in 188 million.This means that the province's current actual capacity is close to 280 million tons.Submitted and production is calculated by the province's actual capacity and the difference between the "capacity" target accounts for one-third of the country's balance, the total output of crude steel is almost equivalent to the United States.

Hebei reported crude steel output more than the declared in the province's steel production capacity.Over the past two years, the gap is widening.In view of the enterprise can't be full production throughout the year, the author of "the lowest actual capacity" high estimate is based on 85% of the average operating ratio.The conservative calculation method to expand the gap.

Crude steel production in hebei province, capacity control goal and the actual capacity estimates (unit: one million tons/year).Actual capacity "of" minimum estimation was made based on average 85% of high availability.Data sources: crude steel production is passedWind info financial terminalThe National Bureau of Statistics data obtained;Data from the first nine months of 2020 data show.The chart used by the carbon bulletinHighchartsTo draw.

According to the report, from 2015 to 2019, has shut down 74 million tons of steel production capacity in hebei province, will also shut down 14 million tons this year.

Differences between the different

Conflicting data in hebei province shows that steel production scale, appear almost insignificant "capacity" target.

The ministry has just completed the new versionThe measures for the implementation of the steel production capacity replacementWork for social comment.The policy文件披露了产能调控政策在落实过程中出现的诸多问题。据悉，2018年至2020年间，共退出炼钢产能1.64亿吨，新增炼钢产能1.39亿吨。这意味着，每关闭1.15吨产能，就新增了1吨产能。

As the current work focus to hit hard by the outbreak of the "new champions" economic recovery, some local governments to relax the control dynamics, the new steel production capacity.The new policy to prevent the use of local government "" in big Numbers game, and with an eye to improve the condition of steelmaking production data is accurate.Documentation requirements, in beijing-tianjin-hebei, shan JinYu, Yangtze river delta and pearl river delta air pollution prevention and control of key areas, such as replacement ratio should be not less than 1.5:1;Other regions should be not less than 1.25:1.

A key problem is that the capacity control target only involved in the production of "register".And a certain amount of capacity is not miit official list.

Iron and steel enterprises can expand capacity by means of the following: report to shut down the old production line or for a long time, which have not been put into use equipment units, but still keep the "register", and its replacement for new production.Many published "replacement" projectThere was noCapacity in the ministry registration list, which means that they probably around the capacity of the control system, or it may operate in the absence of proper supervision.

Interest is firm

Steel production capacity regulation failure for China is to perfect the next "five-year plan" (issued by the expected next year) and the latest is put into practice"Carbon neutral" goals in 2060Sounded a warning: emissions intensive industry foundation is deep and strong interests.

Infrastructure driven after the "new champions" recovery will further deepen the country's economic growth reliance on government projects.

From the perspective of Chinese policymakers, after 2014, 15 years after the trough, steel demand proved far more resilient than expected.However, this kind of steel demand growth is stimulus by the government infrastructure projects and real estate policy.Local government is controlling the steel demand, also control the supply.

Steel production capacity "to" the goal, is not only the political influence of the industry, also confirms to achieve economic growth targets, China's economic reliance on a consistent construction and heavy industry.In 2018, 2019 and 2020, crude steel production growth are more than the current GDP, show dependencies only grow.

Consumption and the service sector is expected to rebound next year as a chance to draw different economic route.