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China must reduce steel output in 2021, says industry minister

Posted on 04 January 2021

China’s sprawling steel industry must ensure it produces less crude steel in 2021 compared with this year’s record level, the country’s industry minister was reported as saying by the official Xinhua news agency on Tuesday.

The world’s biggest steel producer is set to churn out more than 1 billion tonnes of crude steel for the first time in 2020 and a government consultancy recently estimated output would rise a further 1.4% next year amid rapid economic growth and increased fixed-asset investment.

However, Xiao Yaqing, Minister of Industry and Information Technology, called on the steel sector, as an energy-intensive industry, to “resolutely” reduce output and ensure there is a year-on-year decline in 2021, Xinhua reported.

The last time annual steel output in China fell was in 2015, according to official data. The country has long been accused by the United States and the EU of having excess capacity for steel and aluminium production.

Speaking at an annual work conference, Xiao noted China had managed to reach its goal of shutting 150 million tonnes of annual steel capacity ahead of schedule in the current Five-Year Plan period covering 2016-20 and achieved a significant drop in carbon intensity.

However, low-carbon operations, energy saving and green manufacturing remain priorities in the year ahead, the Xinhua report said, adding that a new set of measures on implementing capacity swaps in the steel sector would be released in 2021.

The report did not provide further details. In China, steel mills are unable to launch any new capacity unless an equal or bigger volumes of old capacity has been shut.

Capacity swaps were banned in January this year as some companies were found to be abusing the system.

Source : Reuters