From Reuters:
Many loss-making Chinese steel mills could finally be ready to shut their doors this year, with the government expected to offer more incentives for stricken enterprises to close as the economy slows and a war on smog intensifies.
For years, hundreds of poorly-regulated mills dodged policies aimed at solving the perennial problems of pollution and overcapacity, protected by surging demand and the reluctance of local authorities to jeopardize growth and employment.
…”The central government may have to find a way to deal with it, but eventually the bottom line is they have to close down those steel mills,” said Helen Lau, analyst at Argonaut Securities in Hong Kong.
Under a revised restructuring plan the government will improve
“exit mechanisms” for the sector, allowing enterprises already facing losses to find a way out, according to a draft published by the Ministry of Industry and Information Technology.
More from AsiaOne:
China aims to build three to five giant steel mills and boost the crude steel output of its top 10 steelmakers to more than 60 per cent of the country’s total by 2025, the state-owned Xinhua News Agency said on Saturday.
China, the world’s largest producer and consumer of steel, also aims to boost the production utilization rate for its massive steel sector to more than 80 per cent by 2017, Xinhua quoted the Ministry of Industry and Information Technology (MIIT) as saying in a draft of a revised restructuring plan.
“By 2025, crude steel output of the top ten steelmakers will be more than 60 per cent and China will form 3 to 5 giant steel mills with strong competitiveness,” Xinhua said, citing the draft.
China has hundreds of steel mills with a total annual crude steel capacity of about 1.2 billion tonnes, leaving excess capacity at an estimated 300 million tonnes.
The output of the top ten steelmakers was 36.6 per cent of the total in 2014, down 2.8 percentage points from 2013, MIIT said in February.
As part of the preliminary plan, the government will also improve the threshold and exit mechanism for the steel sector, to achieve orderly shutdowns of inefficient steel mills that do not upgrade.
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