- Move aligns with govt’s 2025-26 Work Plan announced in Sep’25
- Non-compliant firms may face limited credit access, approval delays
Mysteel Global: China has published the names of the first batch of steel companies whose operations the central government has decided meet new standards for the industry announced last January, Mysteel Global has learnt.
The tabling of the first list of compliant companies is seen as a key step toward the introduction of tiered production controls for the industry under which government support — financial, technological, and organisational — will be channelled to top-tier steelmakers, while firms failing to comply will be squeezed out.
The list of 230 mills, released Wednesday by the Ministry of Industry and Information Technology (MIIT), identifies 35 “Leading Standard Companies” — including some of China’s largest and most technologically advanced mills such as Baoshan Iron and Steel and Shougang Jingtang United Iron and Steel — and 195 “Standard Companies” consisting mainly of major regional and specialised mills such as Rizhao Steel Holding Group and Tianjin Pipe Corporation.
Wednesday’s announcement is the first major outcome from the two-year action plan for China’s steel sector outlined in the Work Plan for Stabilising Growth in the Steel Industry (2025-2026) drafted by five government ministries, including the MIIT, and issued last September.
Targeting average annual growth for the sector of around 4% in industrial added value for 2025-2026, the work plan aims to restore the steel sector’s profitability, balance steel market supply and demand, optimise industry structure, and accelerate the sector’s green and digital transformation, as Mysteel Global reported.
To tackle the industry’s chronic overcapacity amid sluggish steel demand, under the work plan, the addition of new capacity by makers will be strictly prohibited and production cuts enforced, while the adoption of technologies such as hydrogen metallurgy, electric furnaces, and speciality steel will be encouraged.
Under the three-tier system, Beijing will align production quotas, fiscal policies, and financial support to companies determined as “leading” and “standard”, rewarding their efforts by prioritising approvals for capacity replacements, financing and projects, for example.
On the other hand, companies identified as being non-compliant or third-tier firms will face restricted access to credit, approval delays, or rejections for projects and differential pricing for crucial inputs such as electricity.
To be judged as meeting the industry standards, a steelmaker’s main process technologies and equipment “shall comply with the requirements of the Industrial Structure Adjustment Guidance Catalogue and shall not include any obsolete process technologies or equipment”, the standards stipulate in one section.
“A pollutant discharge permit shall be obtained in accordance with the law, and its requirements shall be strictly implemented”, it also says, adding that from the beginning of the previous year, “there shall have been no major or larger environmental emergencies, environmental pollution accidents or ecological damage incidents notified by the competent department of ecology and environment”.
Also, a compliant mill shall not have suspended production for more than 12 consecutive months or be in the process of bankruptcy liquidation, nor shall the company be listed in the Business Operation Exception List for failing to comply with information disclosure requirements, for example.
The overall goal of the plan is to steer resources toward efficient mills and cultivate a handful of industry champions capable of leading the sector’s green and digital transition. The move is expected to accelerate industry consolidation, push laggards out of the market, and foster a fairer competitive landscape, according to industry observers. It underscores Beijing’s push to consolidate the domestic steel sector while ensuring the stability of steel supply and the profitability of steel suppliers, Mysteel Global suggests.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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