A Chinese government ministry reportedly is making plans to meet a target for reducing steel production capacity in 2018, two years earlier than it had previously indicated.
According to an online article by Reuters, China’s Ministry of Industry and Information Technology has announced the new timeline for its goal to reduce the nation’s steelmaking capacity. The country is by far largest producer of steel in the world. In 2017, China produced approximately 830 million metric tons of steel, 49 percent of all steel produced globally.
China’s original plan called for idling 150 million metric tons of steel production capacity by 2020. According to Reuters, China’s previous cuts, along with a healthier global economy, boosted steel rebar prices up by nearly 38 percent in the previous 12 months. The price improvement, however, lured some closed mills into resuming production.
“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 of Industry and Information Technology has stated, according to Reuters.
In the first half of 2018, ministry officials will begin inspecting previously closed induction furnace operations to ensure they have not resumed production. According to the online report, the ministry also will encourage companies to build more electric arc furnaces (EAFs) to melt scrap and will urge steelmakers to move production out of high-air-pollution regions.