Policy Landscape: Green Trade and Capacity Control Take Center Stage

• The UK government announced plans to impose a carbon tax on imported aluminum, iron, steel, and cement starting in 2027. The policy aims to level the playing field for domestic green producers by offsetting the cost advantage of high-carbon foreign competitors. However, this initiative has faced criticism from UK steel industry representatives, who argue that its implementation—one year later than the EU's similar Carbon Border Adjustment Mechanism (CBAM)—is too slow. The EU has mandated CBAM for high-carbon imports, including carbon steel, from 2026, highlighting a global push to link trade with carbon footprints.
• In China, the Ministry of Ecology and Environment reinforced carbon emission regulations in a June notice, requiring power, steel, cement, and aluminum smelting enterprises with annual direct emissions exceeding 26,000 tons of CO₂ equivalent to join the national carbon trading market. This move tightens oversight on steel producers, leveraging carbon trading to drive emission reductions and production efficiency.

Technological Breakthroughs: Pioneering Greener and More Efficient Production

• Germany’s DEKRA awarded Shenzhen Carbon Neutral Ningde Times Negative Carbon Metallurgy Technology Co., Ltd. a "Product Carbon Footprint Reduction and Removal Certification" for its ESP hot-rolled pickled cold-formed steel plates and coils. Through 技改 (technical transformation), DingSheng Steel implemented biomass gasification-carbonization technology to achieve net-zero carbon emissions in steel production using scrap steel and green electricity—marking the world’s first commercial "carbon-neutral steel." This breakthrough positions low-carbon and negative-carbon steel products to lead the industry’s green transition.
• Intelligent manufacturing also advanced, with enterprises integrating automated control systems and AI algorithms to monitor production parameters (temperature, pressure, composition) in real time. For example, smart systems in steelmaking now optimize charging ratios and smelting times based on raw material characteristics, enhancing steel purity and reducing defect rates.

Market Dynamics: Supply-Demand Restructuring and Emerging Market Potential

• Demand Trends: Construction remains a key consumer, with emerging economies like India and Southeast Asia driving growth through urbanization and infrastructure projects. India’s smart city initiatives, for instance, are fueling robust demand for carbon steel in bridges, roads, and commercial/residential buildings. The automotive sector also maintains steady demand, with high-strength, lightweight carbon steel increasingly used in vehicle body structures. Despite the rise of EVs, carbon steel’s cost and mechanical advantages sustain its role in components like frames and engine parts.
• Supply Challenges: Fluctuating raw material prices—driven by global ore capacity adjustments, geopolitical factors, and logistics costs—have squeezed producer profits. To mitigate risks, enterprises are forging long-term partnerships with miners and exploring scrap steel recycling to reduce reliance on iron ore.

Outlook