BEIJING: China will cut crude steel capacity by 100 million-150 million tonnes within the next five years in a bid to tackle a crippling glut that has dragged prices down to multi-year lows and saddled firms with huge debts, the country's cabinet said on Thursday.
The State Council also said it would ban new steel projects and work to eliminate so-called stricken "zombie" mills, which have stopped producing steel but have not formally shut down.
The China Iron and Steel Association said the country's total annual crude steel capacity now stands at 1.2 billion tonnes. Total production reached 803.8 million tonnes last year, down 2.3 percent, the first drop since 1981.
Parambir Hanjra Singh
China dropped steel production due to lesser internal demand
Hope they do the same with Aluminium. Chinese and Middle east Aluminium producers are operating over capacity. This couples with reduced demand has led to the slumping of prices of Aluminium globally.
mahendra kumar Nayak
Chinese steel dumping in Idnia is affecting Indian steel industries. Reduction in production in China may give some respite to our industries.
Good news for Indian Steel manufacturing companies. Prices may go up due to reduced Supply. But, bad news for Iron ore exporters. Perhaps, there may be pick up for the Ore from domestic Steel producers.
that will provide some respite to debt ridden steel companies..but again thats long term..need some short term help..
Chinese are raising debts at alarming rate. If this pace continues, they are heading towards severe financial crisis. They need to act now or wait for things to go out of control.
So after Yuan devaluation they are cutting on Steel
Ravi K Gupta
five years are too long. first cut the actual production on yearly basis so that glut of market can be avoided and reasonable prices are maintained worldwide.
It is not a good news. China prediction is that steel demand will further down during next 5 years. It is a red signal to Indian Steel Industry. Banks in India to take care before making further advance to this sector.