China’s Hebei province to slash iron and steel production by up to 10 million tonnes

The northern Chinese province of Hebei, which produces one fourth of the country’s steel, has pledged to slash iron and steel production to tackle problems like overcapacity and air pollution, Xinhua reported.

Production of iron will be reduced by 10 million tons and that of steel by 8 million tonnes this year, it said.

Production of steel and cement will be capped each at 200 million tonnes, and flat glass at 200 million weight cases by the end of 2020 to alleviate overcapacity, Xinhua quoted Hebei Governor Zhang Qingwei as telling the provincial parliament..

The central government has made tackling overcapacity one of its top priorities in the next five years.

An over-reliance on heavy industry for local growth has left Hebei vulnerable to sustained weakness in demand for capital goods both at home and abroad. Some steelmakers are operating at thin margins and more are operating at a loss.

Production of steel, cement and glass have also been widely blamed for the worsening air pollution in the region, Xinhua said, adding that the province has previously said that it will cut a combined 160 million tonnes in steel, cement and coal, and another 36 million weight cases in glass by 2017 compared with 2013 levels.

Cutting overcapacity weighs on Hebei’s economic growth, which came in at 6.5 percent during the first nine months of 2015, making it increasingly challenging for the province to meet the 7 percent target set for the whole year.


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