China’s steel work plan vows to ban new capacity, promote demand

[LONDON] China will ban new steel capacity and reduce production, in the latest move to help balance supply and demand in the one-billion-tonne a year industry.

The government’s measures also include boosting high-end steel output and stimulating usage in construction and transportation, according to a work plan for 2025 to 2026 published by the Ministry of Industry and Information Technology and other agencies on Monday (Sep 22).

Beijing has been expected to lay out its plans for the world’s biggest steel industry since promising to cut output at its annual policy meeting in March, although the latest release did not offer specific targets.

China will “continue to implement production reduction policies, fulfil annual output control targets by supporting advanced enterprises and force the exit of outdated, inefficient capacity, thereby promoting a dynamic balance between supply and demand”, according to the statement.

The government has pledged to grapple with overcapacity across a number of industries. The steel industry is a case in point because supply has remained stubbornly high, while demand is in long-term decline, in large part due to China’s protracted property crisis. BLOOMBERG