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In the middle Kingdom is preparing the last volley of excess capacity

17 April 2017

The Chinese government promises to adopt even tougher measures for the disposal of surplus production. Even the fact that the past year has achieved some goals in this sector, has not solved the situation completely. The situation commented, Xia Nong, the governing National reformation Commission.

Xia called the current year as the «year of atakovany» and the country will have taken even more stringent measures. Thursday was warned by all the delegates of the industry, and they have a chance to prepare of the company. Officials at the meeting said that 65 already reduced millions of tons of do not completely cover the need. Xia, suggested the entrepreneurs not to postpone, not to pull and realize the seriousness of the situation.

Over the past year China has promised to reduce annual volumes of works of one hundred to one hundred and fifty million tons for 3−5 years. The government plans to cut a total of 50 000 000 tons in 2017. The end of the first month of summer promises to dispose of all not a high quality production.

Deputies say that will not let go of control of the situation of low-grade businesses.

Greenpeace reported that the reduction in production last year was ineffective. This happened for the reason that closed in the first place, already idle enterprises. Therefore, the production volume has not decreased, but increased by 35 000 000 tons. Therefore, it is necessary to reduce production, not increase capacity on the existing ones. This will give the ability to control the steel sector in the country.

Luo Tianjun, leading the Department of raw materials in China, do not agree with this opinion. According to him, the market itself needs to control the desired levels of production. In China will be reduced the capacity of steel production, but production levels will not be set. And to say that their country’s growing power incorrectly.

However, the government has launched an investigation for the companies in Tangshan. The greatest attention will be paid to the plants, capacity was reduced, but the amount of production was increased.

In Hebei in 2016, was made more than 88 million tons of steel. This was 7 degrees more than in 2015. And more than all manufacturing companies in the US counting together.

Data are presented IIMP in China reported that last year the price of steel increased by 76.5 percent. This has increased profitability and provided an opportunity to transfer losses to profit.

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