China currently dominates over half of the world's steel production, yet it has always felt it does not have sufficient influence over iron ore markets. Due to the low grade of its own iron ore resources, the predominance of small mines, and the difficulty of mining, China has developed a dependence on overseas iron ore, which has caused concern in Beijing.

In order to increase its say in the supply and price of iron ore, some central departments and the China Iron & Steel Association (CISA) jointly launched the "Cornerstone Plan" in early 2022. In addition to enhancing the development of scrap steel resources, this plan proposes two measures for iron ore sourcing: increasing domestic iron ore production and increasing overseas equity in iron ore.

Pig iron supports steel output surge
Crude steel and pig iron production in China surged in the first two decades of this century. Crude steel production surged over 700% from 2000 to 1,028.86 million tonnes in 2023, while pig iron output officially soared 566% to 872.11mt.

Although EAF steelmaking has been repeatedly promoted, it is hindered by the low cost of BF-BoF steelmaking. The relative scarcity of scrap steel and technological limitations on the types of steel produced by EAFs are also factors.

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