China plans to restructure its steel industry by cutting production in the sector. This was announced by the National Development and Reform Commission (NDRC) at the National People's Congress in Beijing, as per reports.
At the same time, the authorities did not give specifics on the possible scope of cuts in this sector. The market assumed that steel production could be reduced by 50 million tons annually. Experts noted that this is the first time the National Commission has proposed reducing steel production in its draft plans. Traders believe this is a clear signal from the government that it will regulate steel production this year.
Katai's annual steel production has recently remained at more than 1 billion tons, despite Beijing's efforts to reduce it by linking it to carbon emissions. Falling profits of steel mills and strong steel exports partially offset the decline in domestic demand and are causing complaints from many countries. So, China is forced to pay attention to the problem.
Reducing production should also help meet Beijing's carbon targets. A recent analysis reported that a radical capacity reduction (15 per cent in 2025) is needed if the steel industry is to reduce carbon emissions and return to profitability.
According to reports, in 2024, China's steel companies reduced steel production by 1.7 per cent year-on-year, producing 1.005 billion tons. This is the lowest figure in five years. Experts noted that last year is likely when steel production in the country exceeded 1 billion tons. In 2023, China produced 1.019 billion tons of steel, up 0.6 per cent from 2022. Thus, the downward trend in the country's steel industry has stopped after two consecutive years of declining production.
