China’s plan to slash crude steel production capacity

China’s plan to slash crude steel production capacity. Steel production capacity will be cut by 100 million to 150 million tons, China’s State Council announced on Sunday without specifying a time frame.

China’s steel producers have faced slumping steel prices and the industry lost an estimated $12 billion in 2015, according to Asia-Pacific chief economist at IHS Global Insight in Singapore. The industry faces a long period of restructuring and consolidation with excess capacity of about 300 million tons, he said.

Coal production capacity also is to be cut on "a relatively large scale," according to the statement Sunday from the State Council, China’s cabinet. 

Global steel production fell the most in six years in 2015 with China making up the biggest decline, the World Steel Association said Monday. Steel output in the world’s largest producer and consumer of the metal shrank by 2.3 percent in 2015, the biggest drop in 25 years, to 803.8 million metric tons.

V Dalmia
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