The Explosive Growth of Steel Production in China: Why It Matters

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There is no material more fundamental to industrial civilization than steel. Modern buildings, ships, cars, planes and bridges would all be unthinkable without steel, and as pointed out by Allwood and Cullen in their fine recent book on materials production we currently have no viable substitute materials that could perform steel’s multiple functions. We are still very much living in the iron age.

Global production of steel has now reached almost 1.5 billion tonnes each year. The geographic make up of steel production however has changed profoundly in the last decade. In the year 2000 China produced 15% of the world’s steel. Today almost half of the world’s steel is made in China, with Chinese steel production increasing by over 500% since 2000. The astonishing levels of steel consumption in China is illustrated by the fact that 60% of rebar, used in buildings to reinforce concrete, that is produced each year is now consumed in China.


Energy requirements of steel manufacturing in China

Last year China produced 708 million tonnes of steel. On average each tonne of steel produced in China requires the equivalent of 0.69 tonnes of coal in energy consumption. In other words China’s steel industry consumes the equivalent of 500 million tonnes of coal each year, and this being China more or less all of the energy used to make steel comes from coal. China’s steel industry consumes almost 7% of the world’s coal, and if China’s steel industry was a country it would rank 6th globally in total primary energy consumption, ranking above both Germany and Canada. A comparison of this level of energy consumption with current global consumption of wind and solar energy is sobering.

As with all comparisons of energy consumption, methods and calculations should be laid out transparently. Here I will compare the total primary energy consumption of China’s steel industry with global primary energy consumption of wind and solar. In 2012 wind and solar electricity production was 614 TWh (trillion watt hours). However to make a more apples to apples comparison we should ask how much coal would be needed to produce this electricity. Using this approach current annual global energy consumption from wind and solar works out as 200 million tonnes of coal equivalent (using EIA’s conversion methodology and BP’s assumptions for the average thermal efficiency of power plants).  Therefore growth in global energy consumption from wind and solar since 2000 has been approximately half of the increase in energy consumption by China’s steel sector alone. A stark illustration of how little has been achieved in the transition to low carbon energy.

This rapid growth in Chinese steel consumption poses another problem. We are not only fundamentally dependent on steel production, but as Vaclav Smil points out steel production is more or less fundamentally dependent on the large scale use of coal, with no prospect of a transition to low carbon methods of steel production in the short to medium term. Calls to fully dismantle the coal industry must consider how we can make steel without coal, because currently no methods seem particularly feasible. Globally about 1 billion tonnes of coal is used to produce steel, representing 14% of total coal production, with steel and iron production equating to over 6% of global carbon dioxide emissions. This figure is much higher than that of the aviation industry, yet have you ever read an op-ed calling steel manufacturing a rogue industry?

The vast disparities in steel consumption in the world today suggest that a significant increase in overall steel consumption is inevitable and probably desirable. We are however reaching the limits of how efficiently steel can be produced, and despite multiple opportunites to improve the rationality of steel use it appears clear that we will need to mine hundreds of millions of tonnes of coal each year to produce steel for decades, and more likely, generations to come. These realities should be borne in mind by those who claim there are no significant barriers to 100% renewable energy.

Data sources

World Steel Association

BP Statistical Review of World Energy