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The Growth In China’s Steel Industry

January 8, 2015
tags: , ,

By Paul Homewood

 

This post is a continuation of the theme addressed in a couple of recent posts, regarding just how much of the mammoth increase in China’s emissions since 2000 has been the result of offshoring of western industries.

 

One of the key indicators we have to measure this are the Iron & Steel Statistics, from the World Association Yearbook for 2014.

This shows that between 2004 (the first year shown) and 2013, China increased crude steel output from 272 to 821 million tonnes.

 

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But how much of this increase ended up being exported back to us, either as steel products or products containing steel?

 

 

The Yearbook next offers a table of “Apparent Steel Use”. This is crude steel production – exports/+imports of steel products.

The figure for China is 771 Mt, suggesting net exports of 50 Mt, a relatively small number.

 

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(All figures are thousands of tonnes)

 

However, this does not take into account exports of products including that steel, for instance cars. But the Yearbook also has data for these indirect exports.

 

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Netting imports and exports, we get an increase from 12 Mt in 2004 to 57 Mt in 2013.

Taking the direct and indirect exports together, the increase between 2004 and 2013 amounts to 111 Mt, about 20% of the increase in production. Put another way, 80% of the increased output in China over the last ten years appears to have been for domestic consumption.

 

We can crosscheck this logic against Table 58, which shows True Steel Use (defined as Apparent Steel Use –exports/+imports):

 

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No figures are available yet for 2013 (when crude steel production was 90 Mt higher than in 2012). Nevertheless, and bearing in mind these are “finished steel tonnes, rather than crude, true steel use, i.e genuine domestic consumption, rose by 345 Mt over the nine years since 2004.

With indirect exports declining slightly in 2013, the ten-year increase to 2013 would be around 440 Mt, which is consistent with our original calculation.

 

 

Who Is Importing From China?

 

We have concluded that around 20% of the increase in China’s steel output since 2004 has been exported, either as steel or as products including steel, but who has been importing this? 

 

 

 image

 

Well, in terms of indirect net exports/imports, certainly not the obvious cases, the EU or USA.

The EU has actually been increasing net exports, with Italy, Poland and Spain leading the way. Even in the UK, net imports have been declining, as is the case in the United States.

It actually turns out that much of China’s indirect exports have gone to the old Soviet Bloc, Latin America and the Middle East, as countries there attempt to build up their infrastructure and economies.

 

image

 

 

There is one further cross check we can make, the True Steel Use figures.

These tell us that, in the EU, our consumption of steel, and products including steel, wherever the source, has been steadily declining since 2007, and stands considerably lower now than it did ten years ago.

The picture is similar in the USA.

 

image

 

 

 

 

Conclusions

OK. it is only steel, but there is strong evidence that the massive growth in Chinese heavy industry, along with the associated emissions of CO2, has primarily occurred to satisfy domestic demand. Moreover, very little, if any, of this has replaced production in the EU or US.

This conclusion is reinforced by the fact that, according to CDIAC, emissions from cement production, which now accounts for 12% of all Chinese emissions of CO2, have nearly tripled in the last 10 years.

Still sceptical? Let me leave you with a couple more numbers from Table 59 of the Yearbook :

 

In 2012, True Steel Use per capita in China was 445.7kg. This compares with an EU figure of 243.8 and a US one of 353.0.

 

And finally, Euan Mearns asked me to show this graph of CO2 emissions for OECD countries, which I believe are from the BP database. It shows a steady rise before the 2008 financial crash.

 

oecd_CO2

http://www.euanmearns.com/wp-content/uploads/2015/01/oecd_CO2.png

 

 

 

Source 

World Steel Association Yearbook 2014 

http://www.worldsteel.org/dms/internetDocumentList/statistics-archive/yearbook-archive/Steel-Statistical-Yearbook-2014/document/Steel-Statistical-Yearbook-2014.pdf

5 Comments
  1. John F. Hultquist permalink
    January 9, 2015 2:43 am

    China is a big place with many conflicting issues. Much construction material, both native and imported (think iron ore from Australia), has been used to build things. One such are “ghost cities.” The inherent conflicts between Party control and increasing wealth meant that those with money have no systemic way of investing. One approach has been to buy into a high-rise condominium as an investment, with no intention to live therein.
    Cities that few in the developed world know exist have built vast complexes of high-rises that are empty and other fancy things that are unused. Here is a story with photos:
    http://www.businessinsider.com/photos-of-kangbashi-a-ghost-city-in-china-2012-7?op=1

    This is a colossal waste of resources and wealth. With all the other problems China has it may be just a few years before things end badly.

    • John F. Hultquist permalink
      January 9, 2015 2:55 am

      UPDATE: The second photo in the story above is at these Google Earth coordinates:
      39.600471, 109.781147

  2. January 9, 2015 4:18 am

    Paul just a quick reminder, any figs out of asia must be taken with a pinch of salt, due to the cultural bias of producing info that someone wants to hear rather than the actual truth.
    The popn of China is supposed to be really 1.6-1.8bn.
    – But the idea that Chinese stuff is made for China is very strong ..Here in asia it is very common to see a part of town that was 1 storey 6 years ago is now 6 stories high throughout.
    UK consumption often seems much lower than Asia.

  3. Richard111 permalink
    January 9, 2015 8:56 am

    Don’t buy any bathroom fittings or anything of stainless steel with ‘Made in China’ on it.
    You’ll soon see that you’ve wasted your money.

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