The republic’s environmental initiatives have caused substantial alarm
China’s acts for climate interests through steel production curbs and coal reduction have put the dry bulk sector into panic mode. One badly hit commodity is iron ore, as proven by the current Evergrande’s crisis.
Blows to dry bulk
China’s pledge to curb carbon emissions seemed to have gotten some industries into serious trouble. China Iron and Steel Association’s statistics revealed member mills slowed crude steel output slightly to 2.0449 million t/d between 1 and 10 September 2021, as output curbs were maintained at the start of the peak season where demand for steel is the highest. In real estate developer Evergrande’s case, its steel sources were essentially cut. The firm is also battling a $300 billion debt.
In another bombshell, President Xi just pledged at the United Nations General Assembly that China would be carbon neutral by 2060. “China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad,” he announced.
Industry observers warned the move could hobble future coal development. More than 70 per cent of all coal plants built today rely on Chinese funding, according to the Beijing-based International Institute of Green Finance. China’s Belt and Road Initiative for overseas development projects did not fund any coal projects in H1 21, it is the first time that has happened.
Nick Ristic, lead dry cargo analyst at ACM Braemar ACM Shipbroking raised alarm bells earlier. “We are receiving alarming signals from China. The apparent slowdown in China’s economy, along with instability in the property market presents a significant risk (to dry bulk) for the longer term.” He added China’s steel production’s 12 per cent year-on-year decline in August was the greatest slump in percentage since the global financial crisis. Maritime Strategies International (MSI) also cautioned, “Mounting signs are suggesting underlying consumption of raw materials in China is under threat.”
Marine Online News Team
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