In the context of the carbon neutral goal proposed by China, the Iron and Steel Industry (ISI) which is responsible for considerable carbon emissions has to take effective actions to emissions reduction. As Carbon Capture, Utilization and Storage (CCUS) has been recognized as an important technical way to reduce industrial carbon emissions in recent years, its application in the ISI is still greatly limited due to the inherent large cost and high economic uncertainty. Besides, there is also a lack of relevant research on the application of CCUS in the ISI. Therefore, it's necessary to study whether steelworks will participate in the CCUS system by applying carbon capture technology. Focusing on steelworks and employing the System Dynamics method, this paper analyzes technical and economic feasibility of applying carbon capture from the perspective of iron and steel supply chain, and identifies three key variables of the system through sensitivity analysis. The results demonstrate that steelworks can successfully apply carbon capture technology under specific conditions. Three key factors include improving the converting efficiency of reinvestment into capture technology, establishing an appropriate scheme of government subsidies, and fostering environmental awareness of downstream consumers to increase their willingness to pay for low-carbon steel.