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China vows to consolidate fragmented steel industry -The 18th China(Guangzhou)Int'l Stainless Steel Industry Exhibition
12/27/2016 Stainless Steel Exhibition |
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Mr Chi Jingdong deputy director of China Iron & Steel Association said that "The highly fragmented steel industry in China caused cut-throat competitions. to solve the problem, China vowed to enhance its steel industrial concentration rate from current 34% to at least 60% in the coming five years.¡±
Mr Chi underlined that China¡¯s crude steel capacity utilization rate has declined from 79% in 2010 to around 70% in 2015, showing the deterioration of the overcapacity problem. He said that ¡°China¡¯s steel overcapacity has translated from regional, structural supply glut to absolute oversupply.¡±
China¡¯s steel capacity has aggregated to around 1.13 billion tonnes by the end of the 12th five-year period, and large and medium-sized steel companies¡¯ liability ratio has surpassed 70%. Against this backdrop, Beijing made firm determination to consolidate its scrapped steel industry in the following five years through either industrial merger and acquisitions or plant closure.
This year, as a starting point, 72.71 million tonnes of steel capacity has been eliminated in 26 provinces, and some provincial government has finished the elimination task over the whole 5-year period.
However, it is pointed out that, about 73.5% of the eliminated capacities were those dead facilities that have been idled for years, and only 21% of the removed part was swept offline. Even, of the 21%, some were just restarted this year before stopped again, an analyst disclosed to the reporter.
The source further mentioned that ¡°14 provinces just removed the already closed steel plants to answer Beijing¡¯s call, and only a handful of provinces like Hebei, Jiangsu, Shandong and He¡¯nan cut capacities in real sense. The proportion of dead facilities took up no more than 50% in these four provinces.¡±
That is also why insiders generally believed the capacity cut task next year would be much tougher and more pains-taking next year than this year.
China¡¯s steel products make up for nearly one half of global supply, yet the top 10 steelmakers in the country only produce 34.23% of steel products, much lower than the level of over 60% in developed economies worldwide.
-The 18th China(Guangzhou)Int''l Stainless Steel Industry Exhibition
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