The Chinese government is accelerating its targeted steel capacity cuts, aiming to complete the 150 million-tonne reduction this year instead of the initial 2020 deadline, Reuters reported Feb. 7, citing the Ministry of Industry and Information Technology.
"Strictly preventing the addition of new capacity will be the key to successfully pushing the structural supply-side reform in the steel industry in 2018," the ministry said.
In the first half, the Chinese government will check closed induction furnaces to prevent them from resuming production, and local authorities are urged to ban the addition of new capacity. In January, the ministry introduced stricter rules for companies looking to add new steel capacity, requiring them to close at least 1.25 tonnes of old capacity in environmentally sensitive regions for every 1 tonne of new capacity they want to add to their respective operations.
According to the newswire, China shut down 115 million tonnes of steel capacity between 2016 and 2017 but still produced a record 832 million tonnes of steel in 2017.
