Viewing overcapacity of steel, Beijing is targeting to curtail crude steelmaking capacity by 100-150 MnT pa, said Premier Li Keqiang at an executive meeting of the State Council on 22 Jan’16. However, he didn’t specify any time frame on this context.
In last 2-3 years, the Chinese government had already reduced the steel production by 90 MnT and now further planning to reduce the domestic production by 100-150 MnT pa.
Mr Li stated that the central government will guide enterprises with outdated capacity to quit steel sector via mergers and acquisitions. In addition, it will also guide through upgrades and relocation in order to have them adhere to stricter environmental and safety standards as well as energy efficiency.
Among other initiatives, the central government is also planning to set up a fund to support coal miners and steelmakers to reduce their workforce and dispose of bad assets.
It is reported that Beijing has set aside RMB 100 bn (USD 15 bn) every year for personnel placement in next 4-5 years as the state is seeking to cut overcapacity in steel & coal sectors.
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