Posted on 08 May 2025
Chinese authorities are actively advancing efforts to regulate the country's crude steel production, amid mounting pressure to rebalance supply and demand in a market slowdown, officials from the China Iron and Steel Association (CISA) said at the association's Q1 information briefing recently held in Beijing.
Wang Bin, Director of CISA's Planning and Development Department, highlighted that steel production control remains a critical tool in stabilizing the sector in the current absence of more effective, market-oriented and law-based mechanisms.
"Strict enforcement of steel production control measures at both local and enterprise levels will help restore equilibrium and stabilize operations across the industry," Wang noted.
According to China's 2025 national economic development plan, unveiled during the top political meetings "Two Sessions" in early March, the country will intensify efforts to resolve structural issues in major industries, with crude steel production control and industry-wide consolidation remaining key policy priorities this year, as Mysteel Global reported.
Wang said that China's steel industry must transition from capacity expansion to quality-driven growth. He stressed that production control should be guided by multiple indicators, including product quality, workplace safety, environmental performance, energy consumption, and carbon emissions.
A performance-based evaluation system should be established to allow advanced production capacity to operate at full potential, while policy support and resources are directed toward high-performing steel enterprises to facilitate the orderly exit of inefficient and outdated capacity.
In addition, the CISA official underscored the need to establish a new capacity governance framework blending government oversight, industry self-regulation, and market principles.
Over the past year, significant steps have been taken: the Ministry of Industry and Information Technology (MIIT) suspended the current steel-production capacity swap scheme last August and released updated regulatory standards for the sector earlier this year.
Wang also revealed that the revised implementation plan for steel capacity swap guidelines is underway. He reiterated CISA's call to cancel production capacity swaps between different steel companies or groups to eliminate speculative trading of capacity quotas.
"Only through substantive mergers and acquisitions should production capacity integration be allowed," Wang argued. "This will help reduce excess players, increase industry concentration, and ensure resources flow to the most competitive steel enterprises."
Source:Mysteel Global
