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China's Maanshan Iron & Steel to cut capacity by 20% in 3 years

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China's Maanshan Iron & Steel to cut capacity by 20% in 3 years

China's Maanshan Iron & Steel Co. Ltd. plans to cut itssteel production capacity by 20% over the next three years, Reuters reportedApril 8.

The firm plans to slash capacity by 4.2 million tonnes, downfrom current capacity of 22 million tonnes, Maanshan Steel's General ManagerQian Haifan told Reuters.

"We will stick to our export strategy of selling about10% to 15% of our production abroad," Qian told Reuters. "Steel millshave to become more international."

The company also plans to increase its overseas units fromfour to seven next year.

Overall Chinese steel exports were expected to fall in 2016,after a banner year in 2015 when it exported 112 million tonnes, Qian added.

Maanshan Steel is planning to manufacture high-end steelproducts, including auto sheets and bearing steel, which is normally imported.The company expects to convert its low-end production lines by 2020, Qian said.

"Supply-side reform doesn't mean capacity cuts but alsorestructuring in both output and quality," Qian said.

China's steel industry is attempting to cut production bybetween 100 million and 150 million tonnes over the next five years, afterlarge-scale mills lost 11.4 billion yuan in the first two months of 2016 due toa global supply glut.

As of April 7, US$1was equivalent to 6.47 Chinese yuan.