Efforts to trim excess capacity seem to have paid off as the steel industry appeared to have met more than 80% of its annual target by September and steel prices rebounded. This may sound like good news, but according to Caixin it does not necessarily mean that the sector is set for a recovery any sooner than expected. Steel producers responded to pressure by adopting ingenious measures to nearly double the amount of capacity trimmed by counting long-closed production lines as newly reduced overcapacity in a bid to conjure up more-attractive figures. Some of these “dead” steel factories had ceased production for as long as three years. In one survey, industry-watcher CUSteel estimated that 71% of the combined annual targets of 24 provincial governments involved long-shuttered mills.
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