China plans to restructure its massive steel industry by cutting output to address overcapacity, which has led to global trade tensions, according to news reports.
At the National People’s Congress in Beijing, the National Development and Reform Commission (NDRC) announced plans to tackle structural issues in key industries but did not specify the scale of steel production cuts. Market speculation suggests reductions could reach up to 50 mln tons annually.
We will introduce policies to resolve structural problems and curb cutthroat competition through industrial regulation and upgrades, the NDRC said.
According to Citi analysts, this marks the first time in recent years (2019-2024) that the NDRC has proposed steel production cuts in its draft plans.
China’s steel production has exceeded one bln tons in recent years, while weakening domestic demand, partly due to a struggling property sector, has led to excess capacity flowing into overseas markets, prompting protectionist measures from several countries.
