China to 'strictly' ban any new steelmaking capacity in 2018

[BEIJING] China will continue to "unswervingly" cut existing steel capacity and "strictly" ban the launch any new steelmaking facilities in 2018, the Ministry of Industry and Information Technology (MIIT) said in a statement late on Wednesday.

"We will strictly forbid any new steel capacity to be launched... and make sure all outdated steel capacity is eliminated and prevented from reopening," the MIIT said.

The world's largest steelmaking country fulfilled its target of cutting back steel capacity by 50 million tonnes in 2017, according to state media, as well as phasing out another 120 million tonnes of low-tech illicit steel product capacity.

It also plans to meet the 2016-2020 capacity cutback target of eliminating up to 150 million tonnes ahead of schedule in 2018. China has phased out a total of 115 million tonnes steel capacity in the past two years.

However, China's 2017 crude steel output was still expected to exceed a record set in 2016 by climbing to 832 million tonnes, and continuing to rise in 2018, as major mills ramp up operations to take advantage of a price rally.

"We will intensify guidance and supervision of local authorities to make sure the capacity cutback target is met," said the statement.

The ministry also said it will encourage steel mills to use electric-arc furnace technology, a process that generates less pollution than traditional blast furnaces, in line with Beijing's anti-pollution campaign.

REUTERS