The Chinese Steel Industry’s Transformation

The Chinese Steel Industry’s Transformation

Structural Change, Performance and Demand on Resources

Edited by Ligang Song and Haimin Liu

This unique and informative book provides a central reference work on the Chinese steel industry and discusses China’s increasing demand on metals from both macroeconomic and regional perspectives.

Chapter 9: Restructuring China’s steel industry and the implications for energy use and the environment

Guoqing Dai and Ligang Song

Subjects: economics and finance, industrial economics


The steel industry is a relatively large energy consumer and polluter in China. For example, in 2003, the shares of the key pollutants from the steel industry in China’s total industrial emissions were as follows: waste water accounted for 8.4 per cent, sulphur dioxide (SO2) 3.9 per cent, smoke 5.8 per cent, industrial dust 15.3 per cent and chemical oxygen demand (COD) in industrial water pollution 17 per cent. Energy consumption constitutes a significant portion of the overall costs of steel production. For example, in 2000, energy consumption accounted for 35 per cent of total production costs of the steel industry. This compares selected energy-intensive industries as follows: 40 per cent for petrochemical, 50 per cent for aluminum, 40–50 per cent for construction materials and 70–75 per cent for fertilizers. Although the share of energy consumption in the total cost of production looks relatively low compared with these other industries, the steel industry’s level of efficiency in utilizing energy remains far below the global technological frontier. For example, in 2000, the steel industry’s energy consumption per unit of crude steel produced was about 40 per cent higher than the international level based on the best technology applied in those developed countries.

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