China’s Hebei province to close 60 percent of its steel mills by 2020

The northern province of Hebei plans to shut down 240 out of the 400 steel factories in the area by 2020, as part of the country’s efforts to trim overcapacity that has driven prices to their lowest in decades, Caixin Online quoted the provincial governor as saying.

The province, which churns out nearly a quarter of China’s steel output, has banned new projects until it reaches a target of producing 200 million tons per year, Zhang Qingwei said at a media briefing on the sidelines of the ongoing meeting the National People’s Congress, the country’s top legislature, Caixin reported.

Small operators with a production capacity of less than 300,000 tons per year will bear the brunt of a campaign to cut the region’s dependence on polluting heavy industries, a report from Sinolink Securities, a private consulting firm, said.

Over the next two years, the province also plans to cut cement production capacity by two-thirds, or by some 60 million tons. Heavy cuts will be imposed on coal and glass industries, Zhang said.

The round of closures comes at a time of weak demand as the country’s growth rate has slowed. The province will lose 180 billion yuan in revenue and lay off more than one million workers in the next two years, the governor said.

Hebei, which surrounds Beijing, is part of an ambitious government plan to create an extended metropolitan area that stretches all the way to the northern city of Tianjin.


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