China’s push to reduce carbon emissions is providing a tailwind for steel producers worldwide as it limits output from the country and pushes down the cost of key ingredient iron ore, according to Nippon Steel Corp.
Japan’s biggest producer of the metal is on track to exceed its full-year profit target as elevated steel prices and the recent slump in iron ore widen its margins, Executive Vice President Takahiro Mori said in an interview.
Steel output from the world’s biggest producer slumped in July amid a push by Beijing to curb pollution from the sector that accounts for 15% of China’s carbon emissions. The drive to cut production, which is expected to continue through the rest of the year, has pushed down the price of iron ore, the main ingredient used to make steel, by around 30% since mid-July. Chinese hot-rolled steel prices, meanwhile, have remained stable over the last few months.