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China continues to implement programs on closing capacity

24 August 2016

Chinese administrative authorities have developed their own plans regarding the closure of excess capacity. Affected sector for the production of iron, steel, coal mining. The company plans three to five years. Western observers claim that the regional government will close a significant number of businesses. Their number will surpass the stated Central government number. At the end of 2015 it was about stopping 100−150 million tons/year national capacity. Their closing in accordance with the plan will last for five years.

But only the government of Hebei has demonstrated a willingness to stop enterprise with a steel production of 100 million tons annually. This province accounts for about 20% of the total steel production in the country. Shandong, Jiangsu expect the output to 15 million tons annually. Chongqing, Tianjin will display 8 or 9 million tons. Only China’s 28 provinces. Most of them involve a reduction at level 3 or 5 million tons per year.

The national Commission for development and reform Commission has considered the annual plan closing capacities. At the end of last month it was implemented by 47%. For the seven-month period from the system has managed to bring the steel power, producing 21 million tons per year. The planned performance was achieved only four provinces. Among them, only Zhejiang metallurgical industry is sufficiently developed. Eight provinces, including Hebei, closed from 10 to 35% of the capacity. Ten more provinces ignore the task. NDRC, focusing on the results obtained, campaigning for the acceleration of the processes. Authorities in some provinces promised the implementation of plans in the shortest possible time.

The authorities in the provinces of Henan and Jilin approved the plans stop excess steel capacity. In the second half of the planned closure of enterprises whose capacity will be 3.5 million tons/year. In China annual steel production is about 1.3 billion tons. Accordingly, considering the capacity is very small. However, these provinces do not represent a major steel centers.

National Bureau of statistics of China said that in July, the metallurgists of the country have developed 66,81 million tons of steel. This figure exceeds the last year’s result of 2.8%. For the seven-month period in China released 466,52 million tons. Compared to 2015, the reduction was only 0.5%.

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