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China Vows to Tackle Steel Overcapacity With 2020 Cut Targets

  • Aims to reduce estimated existing capacity by as much as 13%
  • Slowdown in demand exposed `contradictions and problems'

China will trim the size of its loss-making steel industry by the end of the decade in reforms directed by President Xi Jinping that seek to cut overcapacity and may threaten hundreds of thousands of jobs.

The world’s biggest producer will close between 100 million and 150 million metric tons of annual crude steel capacity by 2020, according to an outline published on the website Thursday of the State Council, the country’s highest administrative body. That’s as much as 13 percent of existing capacity estimated by the China Iron & Steel Association last month at 1.2 billion tons. China’s output, which accounts for about half the world’s production, fell last year for the first time since 1981.