Photo/Shetuwang

China will unveil a guideline to improve the efficiency and shorten the process of steelmaking, the Ministry of Industry and Information Technology (MIIT) said Monday.

"As China's steel scrap resources move to a phase of high recovery and the reform of electric power system continues to advance, developing electric furnace steelmaking will be an essential part of the restructuring of the steel industry," said Wang Wei, director of MIIT's department of the raw materials industry.

Steel scrap is the green material of the steel industry, as well as the sole substitute for iron ore.

Producing one tonne of steel with steel scrap saves 1.6 tonnes of iron ore, 0.35 tonnes of standard coal and reduces 1.6 tonnes of carbon dioxide emission.

As raw materials of substandard steel and steel scrap have been scarce in the past, it came with a high pricetag. Enterprises had to adopt a long steelmaking process with iron ore being the raw material.

However, steel scrap consumption surged as substandard steel was phased out and the prices of import iron ore have increased sharply over the past two years.

According to data from the China Iron and Steel Association, the output of China's crude steel jumped 9.9 percent year on year in the first half of this year, while pig iron output only saw an expansion of 7.9 percent during the same period.

Meanwhile, the imports of iron ore dropped 5.9 percent compared with the same period last year as well, pointing to the growth in steel scrap consumption.

For the next step, Wang said China will continue to push forward the steel industry's transform of ultra-low emission and optimize the industrial layout.

"By 2020, the crude steel capacity will be controlled within about 200 million and 1.5 million tonnes in Hebei and Tianjin, respectively," Wang added.

Email: gaohan@nbd.com.cn