Posted on 24 Oct 2016
Baosteel Group and Wuhan Steel Group completed their targeted capacity cuts for this year, the Xinhua News Agency reported on Saturday.
Wuhan Steel may exceed its capacity cut, and China's centrally run steel companies could reach their combined 7.19 million ton reduction target for 2016 as early as this month, Li Bing, director of the State-owned Assets Supervision and Administration Commission's Enterprise Restructuring Bureau, was also quoted as saying.
China has pledged to cut 100 to 150 million tons of crude steel production and 500 million tons of coal production in the next three to five years as it tries to tackle price-sapping capacity gluts in the sectors.
The targets are part of a wider 45 million-ton reduction target for the country's steel sector in 2016. Details of Baosteel and Wuhan Steel's individual targets were not reported by Xinhua.
China's centrally run steel companies will cut crude steel capacity by 21.4 million tons within three years from the start of 2016, Xinhua quoted Li as saying. Of the reduction, 16.4 million tons will be achieved through cutting capacity, while 3.93 million tons will be completed via mergers and restructuring, Li said.
Anshan Steel Group, China's No.4 producer, is on track to meet its target on time, Li added.
China, the world's top producer and consumer of steel, is restructuring to tackle inefficiencies in the sector and cut overcapacity that has boosted cheap exports and caused some producers elsewhere to shut.
Baosteel Group will fully take over Wuhan Steel Group, creating the world's second-largest steelmaker after ArcelorMittal. China aims to push through a merger of Anshan Steel and Benxi Steel by the end of 2016, an industry group official said last month.
