China has vowed to ban the addition of steel capacity this year in a bid to tackle oversupply, reported Caixin.
The China Iron and Steel Association (CISA), an industrial group that describes itself as a “bridge between government and enterprise,” said on Monday that the country’s steel industry will not allow the addition of new steel capacity this year.
That would help consolidate the achievements of supply-side structural reforms, the group said, reforms that reduced around 150 million tons of excess capacity between 2016 and 2018. The ban came after a forecast by CISA found slowing demand growth would see it fail to keep up with supply this year.
China’s total crude steel output for 2020 would grow at a similar rate to last year’s 6%, but growth in demand should slow sharply to 2% amid a broader economic downturn, CISA said at its annual meeting on Saturday.