China Aims to Cut Steel Output, Prune Overcapacity, Document Shows

Steel News  |  2025-08-28 13:47:52   |   By

China's industry and commerce ministries did not immediately respond to Reuters' request for comments.

SEATTLE (Scrap Monster): China will push to cut steel production between 2025 and 2026, according to an official document reviewed by Reuters and a source with knowledge of the matter, as it tackles overcapacity that has hit prices and fed a worldwide protectionist backlash.

The world's largest steel producer will strictly curb new capacity and reduce production, the planning document from the industry and environment ministries, among others, showed.

'The steel industry is currently facing excess supply and insufficient effective demand, leading to a supply-demand imbalance that affects development quality and efficiency,' it read.

The document did not set targets for output cuts pledged by the government earlier this year. Crude steel output fell 3.1% in the first seven months of this year.

It said China would achieve annual steel output cuts by forcing the closure of outdated and inefficient furnaces and supporting the development of advanced enterprises.

China's industry and commerce ministries did not immediately respond to Reuters' request for comments.

A source familiar with the discussions confirmed the document's accuracy, saying it was a final draft. The source spoke on condition of anonymity as the matter is sensitive.

A 2023 effort to restructure the industry foundered in part because Beijing sent mixed signals to steelmakers about how aggressively it planned to crack down on excess capacity.

The latest plan includes a goal to grow the industry's value-add by 4% a year, invest in new technology and promote steel use in infrastructure and residential construction, raising questions about Beijing's ambitions this time around.

Additionally, Beijing will ratchet up efforts to ensure the supply and price stability of raw materials, including iron ore and coking coal, according to the document.

Courtesy: www.reuters.com