For China's steel industry to achieve carbon peak and carbon neutrality, there are two core issues that need attention: the total output control of crude steel and the alternating evolution of three steel manufacturing processes (blast furnace–basic oxygen furnace long process, full scrap electric arc furnace process, and hydrogen reduction–electric arc furnace process). Currently, China's steel industry should leverage the broader context of "dual carbon" goals to guide scrap steel resources towards the electric arc furnace process as much as possible. This will gradually adjust the layout of the iron resource structure, product structure, and process structure within China's steel sector.

粗钢产出总量控制

Carbon emissions in the steel industry are strongly correlated with crude steel output. For China's steel industry to achieve carbon peak and neutrality, it is essential to first adjust the industrial structure at a macro level. This involves consistently and moderately reducing total output, phasing out outdated capacity, avoiding further increases in crude steel production, and refraining from large-scale exports of low-value-added steel products. Instead, the industry should pursue a high-quality, low-volume development path.

The following specific measures can be taken: First, guide the steel industry to shift from scale expansion to improving energy efficiency and upgrading product quality; study the rational demand for steel and total volume control issues centered on structural adjustment and industrial upgrading to regulate the total output of steel. By comprehensively analyzing data changes in China's steel industry since the new century—including annual crude steel production, the average daily output of crude steel on a monthly basis over the past two years, the price of rebar at month-end, direct steel exports, and indirect exports of steel products (see figures)—it is preliminarily concluded that the current crude steel production in China generally exhibits a state of oversupply. The steel industry has entered a phase of fluctuating decline in volume, but the duration and extent of this downward fluctuation still require further observation. The following section will predict and discuss future trends in China's crude steel production.

To scientifically predict China's future crude steel production, this study refers to the (referring to environmental load, population size, per capita, and unit environmental load) model prediction method and optimizes the modeling on this basis. It links crude steel production with economic development level, population size, energy consumption, and energy consumption structure, thereby conducting a predictive analysis of China's annual crude steel demand from year to year. This study establishes three development scenarios—high production, medium production, and low production—by adjusting growth rates and population growth rates, constructing a national crude steel production prediction model (the model calculation results are shown in the table).

Analysis of the calculation results reveals the following: First, China's steel production will show a decreasing trend in the future. Under the high-production scenario, the country's crude steel output is expected to decline from ** billion tons in ** to ** billion tons in **, a drop of **%; under the medium-production scenario, crude steel production is projected to fall to ** billion tons in **, a decrease of **%; under the low-production scenario, crude steel output is estimated to drop to ** billion tons in **, a reduction of **%. Second, China's per capita apparent steel consumption will exhibit a downward trend in the future. Since China's steel industry primarily serves domestic demand, the forecast for future crude steel production assumes a balance in steel imports and exports. Under the high-production scenario, the per capita apparent steel consumption in China is about ** kg in **, decreasing to ** kg in **; under the medium-production scenario, it is approximately ** kg in **, falling to ** kg in **; under the low-production scenario, it is around ** kg in **, dropping to ** kg in **.

Secondly, we will further advance the supply-side structural reform in the steel industry. During the process of group restructuring, outdated production capacities, equipment, processes, products, and enterprises that fail to meet national environmental emission standards, energy consumption limits, and product quality standards will be phased out. Projects aimed at expanding steel production capacity under any name or in any form are strictly prohibited. For steel smelting projects that are genuinely necessary for renovation, the capacity replacement measures must be strictly implemented, and oversight of capacity replacement must be strengthened.

Third, continuously optimize the import and export policies for steel products. Continue to encourage the import of primary steel products such as billets, ingots, and semi-finished goods; adhere to a domestic demand-oriented approach, avoiding the export of large quantities of low-value-added steel products, coke, and billets as a solution to overcapacity, and fully utilize economic and taxation measures to control the export volume of primary products like steel (billets) and coke; strictly restrict the export of high-energy-consuming and low-value-added products; encourage the indirect export of processed high-end finished goods or electromechanical products.

三类典型钢铁制造流程交替演变

From a process perspective, under the "dual carbon" goals, the steel industry will gradually evolve into three typical manufacturing processes in the future: 1. **Blast Furnace—Basic Oxygen Furnace—High-End Thin Plate, Thick Plate, and Medium Plate Process**: The blast furnace—basic oxygen furnace (BF-BOF) long process will inevitably undergo gradual production reduction, yet it will still occupy a certain proportion in the process structure. It will progressively transition to primarily producing flat products, especially high-end sheet materials such as premium thin plates, thick plates, and medium plates in large quantities. These facilities will mainly be located near coastal deep-water ports and large mining areas. However, in line with the "dual carbon" strategy—particularly considering the increasing availability of domestic scrap steel resources—using the long process to produce bulk construction materials like rebar and wire rod will hinder the achievement of the "dual carbon" objectives.

The second approach is the scrap steel-green electricity-electric furnace-long products (urban peripheral steel plants) process. The full scrap steel electric furnace process will initiate a transformation in the production process of long products for construction, gradually replacing the small and medium-sized blast furnace-converter process used to produce bulk products such as rebar and wire rods. Located around urban areas, these plants are "urban steel mills" centered on the "two chains and one flow (supply chain, service chain, and production manufacturing process)" system.

The third approach involves the hydrogen reduction-electric furnace process for producing thin plates, medium-thick plates, seamless pipes, and special steel (with hydrogen sources including gray hydrogen, green hydrogen, etc.). These methods are still in the active exploration and development phase. A comprehensive analysis should be conducted in stages to assess their economic viability and the market adaptability of the products. Careful selection and prudent investment are essential.

The alternating evolution of these three types of steel manufacturing processes will be closely related to the output and flow of China's future scrap steel resources. Currently, scrap steel can be categorized into self-generated scrap from steel mills, downstream industrial processing scrap, and social depreciation scrap. Based on the predicted results of China's future crude steel production as shown in the table, different methods—such as the conversion coefficient method and the steel product life cycle method—are applied to various types of scrap steel to construct a predictive model for scrap steel resources. This model is used to scientifically estimate the annual scrap steel resources in China from [specific years] (the estimation results are presented in the table below).

From this, it can be observed that: First, China will have an ample total supply of scrap steel resources in the future. According to the forecast results, under various scenarios, before [specific year], the annual growth rate of China's scrap steel resources will be relatively slow. By [specific year], the scrap steel resource volume is expected to remain around [specific number] billion tons, an increase of [specific number] billion tons compared to [specific year], representing a growth of approximately [specific percentage]%. Around [specific year], the country will enter a peak plateau period for scrap steel resource recovery, with the peak volume of scrap steel resources expected to reach about [specific number] billion tons per year, an increase of roughly [specific number] billion tons compared to [specific year]. Between [specific year] and [specific year], China's scrap steel resource volume will show a declining trend but will generally remain above [specific number] billion tons per year. By then, domestic steel resources and self-produced ores will largely meet the demand for crude steel production, significantly reducing the dependence on imported iron ores.

Second, depreciated scrap steel constitutes the main portion. Under this scenario, among the three types of scrap steel resources, the proportion of depreciated scrap steel resources is significant. Currently, depreciated scrap steel accounts for approximately % of the total scrap steel resources, and this figure is expected to rise to around % by the year , further increasing to over % after .

Third, the volume of scrap steel resources is increasing year by year. Between the years —, China's scrap steel resources will experience two phases of rapid growth, reaching a peak plateau period around the year , after which it will gradually decline, though the decrease will be modest.

Guide the flow of scrap steel resources in a reasonable manner. In recent years, China's steel industry has consumed approximately 220 million tons of scrap steel annually, with the comprehensive scrap ratio exceeding 20% for five consecutive years. However, the consumption of scrap steel in the blast furnace–basic oxygen furnace (BF-BOF) long process accounts for about 90%, while the short process only accounts for about 10%. The proportion of scrap steel consumption in the long process relative to the total scrap consumption in the steel industry has increased from 70% in 2015 to 90%, whereas the proportion for the short process has declined from 30% in 2015 to 10%. It can be said that the majority of newly added scrap steel resources in recent years have flowed to long-process enterprises, which is actually unfavorable for the green and low-carbon transformation of the entire industry in the future.

To quantitatively analyze the contribution of different scrap ratios to carbon reduction in the long process, a calculation model for carbon emissions in the long process under various scrap ratios was constructed. Two scenarios were set: ensuring unchanged converter steel output and ensuring unchanged hot metal input. Based on material balance and heat balance, the changes in total carbon dioxide emissions and emission intensity of the steel production process corresponding to different converter scrap ratios (%, %, %, %) were analyzed (see table).

From this, it can be seen that: First, scrap steel itself is an energy-carrying resource. Whether in long or short processes, using scrap steel to produce steel can significantly reduce the carbon emission intensity of steel production. Second, excessively increasing the scrap ratio in converters requires certain necessary measures, such as scrap preheating and the addition of heating agents (carbon-based or silicon-based). Third, under the mode of maintaining unchanged hot metal input, excessively adding scrap steel for production is essentially a disguised form of increased output. This is also an implicit driving force behind the consumption of scrap resources in long processes, leading to persistently high scrap prices and increased production costs for electric furnace processes. Although this mode reduces the carbon emission intensity per ton of steel in long processes, the total carbon emissions of enterprises actually increase.

Fourth, organizing production under the model of ensuring unchanged steel output from converters and increasing the scrap ratio will inevitably require reducing production in the iron-making process. This is beneficial for reducing carbon emissions in enterprises and should be moderately encouraged under the premise of not affecting product quality. Fifth, high scrap ratio smelting helps reduce the intensity of carbon dioxide emissions. However, socially sourced scrap steel purchased by enterprises often contains more impurity elements, such as chromium, nickel, copper, phosphorus, and sulfur. Excessive use of such scrap steel in converter smelting can significantly impact the quality of molten steel. Therefore, in high scrap ratio smelting, especially when producing high-grade steel grades, it is necessary to pay more attention to the refined classification of scrap steel to ensure the quality and stability of the scrap charged into the furnace. On the other hand, the scrap ratio should be moderately controlled within a certain range. Based on the actual production experience of a steel plant, under current scrap conditions (where purchased social scrap accounts for more than %), the scrap ratio should be controlled at %% when smelting high-grade steel grades. This approach should be the future development direction of the blast furnace-converter long process.

Overall, China's steel industry should leverage the broader context of "dual carbon" (carbon peak and carbon neutrality) to promote the use of scrap steel.