IRON and STEEL
China's Hebei province will reduce crude steel production capacity by 14mn t/yr in 2020, as part of its plan to reduce 40mn t/yr of capacity during 2018-20.
Hebei, China's largest steel-producing province, reduced capacity by 14mn t/yr in 2019 and 12.3mn t/yr in 2018.
China did not set any steel capacity reduction targets for 2019, neither will there be any for 2020, as the country claims to have completed its five-year economic plan for 2016-20 capacity reduction target of 150mn t/yr all within 2018.
Cuts in older and redundant steel capacity has helped China clean up its air quality, which has also led Beijing to relax winter restrictions on steel production that are much looser than in 2017 and 2018.
But China's crude steel output increased sharply in 2018 and 2019 despite these cuts, as steel mills are replacing older capacity with smaller volumes of efficient and more environment-friendly capacity. Firm downstream demand from the real estate sector has prompted mills to operate at near-peak capacity.
By Prasenjit Bhattacharya