China’s Top Steel Province Pledges Cuts as G-7 Vows Joint ActionBloomberg News
China’s top steel-making province aims to shutter capacity equivalent to about a month of production, amid warnings over a global glut of the metal from world leaders gathered in Japan for an economic summit.
Hebei, the northeastern province that makes nearly a quarter of China’s steel, has pledged to close down 14.2 million metric tons of annual capacity this year, according to a report by the official Xinhua news agency. That would account for nearly four weeks of last year’s output of 187.9 million tons. Xinhua cited a letter of commitment signed by the provincial government and companies. They also promised to cut about 17.3 million tons of iron-making capacity.
Group of Seven leaders agreed to work together to tackle oversupply in China’s economy at a meeting that specifically discussed steel, Japanese Deputy Chief Cabinet Secretary Hiroshige Seko told reporters at the Ise-Shima summit in central Japan. China’s steel exports surged to a record last year, prompting trade action from India to the U.S.
China’s government plans to cut between 100 million and 150 million tons of capacity by 2020 as a fading infrastructure boom leaves the world’s biggest producer saddled with too many unprofitable plants after decades of rapid growth. Hebei’s announcement builds on a pledge earlier this month by state-owned Hebei Iron & Steel Co. Ltd., the province’s biggest steelmaker, to lead China’s restructuring by closing 5 million tons of capacity over this year and next.
— With assistance by Martin Ritchie