Posted on 12 Mar 2025
Several delegates of the National People's Congress (NPC) proposed to promote capacity management in China's steel industry to curb capacity expansion and achieve high-quality development in this sector during the ongoing ''Two Sessions" meetings.
The "Two Sessions" -- the annual meetings of the National People's Congress and the National Committee of Chinese People's Political Consultative Conference -- began on March 4 in Beijing and will wrap up on March 11.
When addressing the sessions on March 6, Tan Chengxu, an NPC deputy and chairman of state-owned Ansteel Group, advocated for accelerating the establishment of a scientific capacity management model for the steel industry, guiding steel enterprises in phasing out outdated and inefficient production capacity, and hastening the industry's transformation and upgrade. He also suggested taking measures to support the merger and reorganization among Chinese steel enterprises.
Tan's proposal was consistent with the views of other delegates from the steel industry. Zhao Minge, chairman of Shougang Group located in Beijing and president of the China Iron and Steel Association (CISA), also mentioned steel capacity management and M&As within the industry in an interview before the political meetings.
Zhao said that China's steel capacity has now reached 1.15 billion tonnes/year, and by the end of this year, over 150 million t/y of newly added capacity through capacity swap projects will be put into operation, according to a report released by CISA's official media China Metallurgical News.
How can the steel industry establish a new capacity management model? Zhao stressed the need for stronger self-regulation and strict control over new capacity expansion. He called for eliminating steelmaking facilities with outdated technology, high pollution levels, and low production efficiency - measures widely agreed upon to address overcapacity.
Zhao also highlighted the role of M&As in phasing out outdated facilities, lowering operational costs, and improving production efficiency. Additionally, he urged Chinese steel producers to actively explore overseas expansion and rationally relocate production capacity.
"The main challenges facing China's steel industry in capacity reduction are its large production scale and high costs," Baowu's chairman Hu Wangming voiced his concerns. He called on the government to implement coordinated policies for steel capacity management and strengthen market-driven regulatory measures.
Source:Mysteel Global
