A senior official at the China Iron and Steel Industry Association (CISA) said he is confident about the effectiveness of the government’s campaign to cut overcapacity in the steel sector, Global Times reported.
Wang Liqun, vice chairman at the CISA, said at an industry expo that the central government was giving unprecedented attention to the issue of overcapacity and there will be results, according to financial news portal cnstock.com.
China aims to cut 100 million to 150 million tons of crude steel capacity in the next five years starting from 2016, the State Council, China’s cabinet, said in February.
The nation’s crude steel output reached 803.8 million tons in 2015 or 50.3 percent of global production, data released by the World Steel Association in January showed.
Liu Xinwei, a steel industry analyst with Shandong Province-based consultancy Sublime China Information, told the Global Times a lot depended on the implementaion of the programme regardless of the government’s pledges.
“It depends on to what extent the plan of cutting overcapacity is carried out at the local levels,” Liu said.
Some progress has already been made. For example, in North China’s Hebei Province, a major steel producing region, 41.06 million tons of steelmaking capacity was eliminated from 2011 to 2015, Chinese media has reported.
Regarding the complaints in some countries regarding increased imports of Chinese steel, Wang said more than 80 percent of China’s steel output is intended for the domestic market and is not appropriate to lay all the blame on China for the global steel glut, the newspaper said.
The nation’s steel output is now widely believed to have peaked, with 2015 output down 2.3 percent from that of 2014.