Beijing intensifies efforts to cut steel overcapacity

China is likely to shut down a host of smaller steel plants this year as part of efforts to cut excess capacity, the Wall Street Journal reported. Jia Yinsong, an inspector at the raw materials department under the Ministry of Industry and Information Technology, said that the closures would wipe out 16 million metric tons of annual capacity. In March, Beijing said it wanted to close down plants with an annual capacity of 25 million tons by the end of 2011. If it can meet the target outlined by Jia, then it would be more than halfway toward reaching the three-year goal within just one year. According to the MIIT, steel plants currently under construction have a total annual capacity of 58 million tons. Once the 660 million tons of existing capacity is taken into account, China is capable of producing 200 million tons per year more than is actually required. While Beijing is reluctant to take broad measures that would slow the entire economy, it is looking to take action in problem industries, such as steel, cement and plate glass.