China's Baosteel increases steel capacity cuts

[BEIJING] China's Baosteel Group said it would cut steel production capacity by 11 million tonnes from 2016 to 2017, according to an announcement posted on its website on Friday, ahead of an earlier target.

The company had previously set a goal of cutting 9.2 million tonnes of excess capacity between 2016 and 2018.

Baosteel Group has taken over Wuhan Iron & Steel Group to form the country's top steelmaker Baowu Steel Group and also the world's second-largest maker after ArcelorMittal.

The China Iron & Steel Association (CISA) said last week that China is on track to hit its 2016 target for crude steel capacity cuts of 45 million tonnes by late October, with extra reductions expected in the last two months of the year.

Overcapacity in China's steel sector has created trade tensions, with India, Australia and the United States imposing duties on Chinese steel exports amid allegations of dumping.

Dai Zhihao, president of Baoshan Iron & Steel said in August that its parent Baosteel Group would cut 12.20 million tonnes of capacity through 2018, in line with Beijing's efforts to curb oversupply.

REUTERS