China's Top Steel Province Will Cut Output in 2016, Xinhua Says

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The biggest steel-producing province in China will cut output this year to ease pollution and help curb oversupply, Xinhua News Agency cited Hebei Governor Zhang Qingwei as saying.

The northern province plans to reduce steel output by 8 million metric tons in 2016, Governor Zhang told local lawmakers, according to the Xinhua report. Iron ore production will be cut by 10 million tons, Zhang said.

Demand for steel in China, which accounts for about half of global production, is shrinking as the economy slows, prompting mills to cut back supplies. The contraction has hurt prices of steel products and iron ore, which tumbled to multi-year lows in 2015.

In 2014, mills in Hebei produced 185.4 million tons of steel, according to data from Beijing Antaike Information Development Co. tracked by Bloomberg. In the first 11 months of last year, mills in the province made 173.2 million tons, the data show.

Iron ore with 62 percent content delivered to Qingdao fell 1.2 percent to $42.13 a dry ton on Friday, according to data compiled by Metal Bulletin Ltd. The raw material, which sank 39 percent in 2015, bottomed at $38.30 on Dec. 11, a record in daily price data dating back to May 2009.

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— With assistance by Alfred Cang

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