GHG Foot Prints Falling: Chinese Steel Company, FerroChina, Shuts Down Under Financial Pressure

Benxi Steel Mills In China

After the Berlin wall "fell" two causal explanations were offered: Western foreign policies succeeded; or, over-investment in inefficient industries of defense destroyed the economy. Regardless of which argument is correct, an indirect environmental consequence was indisputable: the Soviet greenhouse gas "footprint" was much reduced for years following. Here is any early sign that the world financial crisis is having a similar environmental effect in China: the shuttering of a coal-intensive steel industry (even FerroChina's web site is completely down).

Steel maker FerroChina Ltd. yesterday became one of the highest-profile Chinese victims yet of the global economic crisis, saying it was unable to service huge debts and was stopping production. It said it could not pay back part of its working capital loans worth 706 million yuan ($118.6-million), while warning even larger loans were due soon.

Part of the cause of the shuttering may have been excess capacity in China for steel making. China has been a net exporter of steel for some time, and there has been pressure to shutter the older, inefficient mills since 2006. For background, see this article from China In Transition, Excess Production Capacity is the Result of not only Cyclical but also Structural Factors Image credit::Guardian.co.uk,Pollution In China

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