According to the latest statistics issued by China’s Ministry of Industry and Information Technology (MIIT), as of the end of June this year 21 provinces and regions in China had announced 140 steel capacity replacement projects, involving the construction of 200 million mt of iron-smelting capacity and 218 million mt of steelmaking capacity. Under these capacity replacement plans, Chinese steel mills will eliminate 228 million mt of iron-smelting capacity and 246 million mt of steelmaking capacity.
According to China’s capacity replacement plans issued in 2015 and 2017, in environmentally sensitive areas, including Beijing-Tianjin-Hebei Province, Yangtze River Delta and Pearl River Delta, the capacity replacement ratio should at least be 1.25:1.0., i.e. 1.25 mt of old capacity eliminated for each mt of new capacity built.
Meanwhile, the provinces of Hebei, Jiangsu, Fujian and Shandong will integrate the capacities of small and medium-sized steel enterprises through the purchase of steel production capacities to promote the further concentration of the steel industry.
Hebei Province will eliminate 27.24 million mt of iron-smelting capacity and 22.98 million mt of steelmaking capacity via capacity reduction and trans-regional transfer.