Brazilian mining giant Vale SA has vowed to step up investment in low-carbon solutions along the steel value chain in China, according to its top executive.
The country's demand for steel is expected to remain resilient through 2030, holding significant potential for decarbonization due to its large scale. Decarbonization, in industry parlance, refers to the reduction or elimination of carbon dioxide emissions from processes like manufacturing or energy production.
Vale said it believes China's steel demand will remain resilient and plateau at high levels supported by sound fundamentals in the long term, bringing massive opportunities to multinational mining companies such as itself, Chief Executive Eduardo Bartolomeo said.
Continued urbanization and development of the industrial sector will create fresh demand for steel and iron ore in China, Bartolomeo said during a recent news conference.
A cross-country comparison suggests that China's demand for steel and iron ore may plateau and stay at decent levels in the next few years, a process that will also accelerate the global green transition, he added.
Meanwhile, as China's top policymakers assure greater efforts to attract foreign capital, widen market access, promote further opening-up and ensure a level playing field for both domestic as well as foreign companies, Vale continues to hold a positive outlook for the Chinese economy and upholds its long-term commitment to the China market, Bartolomeo said.
The company has said previously that it is cooperating with some 50 steel companies to pursue iron-making solutions focused on fewer emissions, including many leading Chinese steel companies.
"As policymakers in China have sent more pro-growth signals since the second quarter of 2023, property sector demand may gradually bottom out, stabilizing short-term iron ore demand outlook in China," he said.
Vale has been stepping up investment and local cooperation in the country in recent years. In March, it announced seven agreements with various Chinese partners to strengthen its relationship with China, one of the largest producers and consumers of steel in the world.
The country has been actively exploring technologies in decarbonization of the steel value chain, said Zhu Yi, a senior analyst at market monitor Bloomberg Intelligence.
Multinational mining companies like Vale play crucial roles in supporting China's transition to a low-carbon steel industry, as China's steel mills rely on overseas suppliers for more than 70 percent of their iron ore needs, Zhu said.
According to Bartolomeo, China has been the company's largest market since 2006 and destination for more than 50 percent of Vale's iron ore products since 2014.
The company has supplied China with approximately 3 billion metric tons of high-quality iron ore products, as well as with high-quality base metals products such as nickel and copper.
"Vale has been operating in China for 50 years and we look forward to continuing our business as a long-term partner of China and a reliable raw material supplier of the Chinese iron and steel industry," he said. "Vale continues to hold a positive outlook for the Chinese economy." chinadaily
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