The government has stepped up the pressure on excess capacity in the steel sector. It intends to speed up the elimination of obsolete capacity and lessen the country’s position as a top global supplier.
Jia Yinsong, an inspector at the raw-materials department under the Ministry of Industry and Information Technology, said the government is likely to shut plants with 16 million metric tons of annual capacity this year.
The latest target on containing overcapacity suggests the government wants to move faster to achieve its goal.
In March, Beijing said it was planning to close down plants with an annual capacity of 25 million tons by the end of 2011. If the newly stated 2009 target is achieved, it would mean accomplishing more than half the three-year goal within the first year itself.
Wall Street Journal said that Xiong Bilin, an inspector at the commission’s industry coordination department, suggested that Beijing could be happy with a smaller steel industry that no longer enjoys pre-eminent-producer status on the global stage—a significant shift for a country that produces half the world’s steel. These cuts will apparently be implemented quite quickly.