North China cuts coal and steel overcapacity
Global Times reported that Northeast China has managed to cut overcapacity in steel and coal ahead of schedule as annual GDP growth in the country fell to 6.7 percent in the first three quarters of this year.
According to industry data, China has set goals to cut steel and iron making capacity by 45 million tonnes and coal-production capacity by 250 million tonnes. With these goals completed, the nation's steel and coal industries regained a modest profit margin.
Liaoning Province, the only province to see GDP contraction in the first three quarters, has come in ahead in its annual target of cutting 13.27 million tons of coal capacity and 6.02 million tons of steel capacity, according to a statement the provincial government sent to the Global Times on Wednesday.
As of the end of October, Liaoning has closed 44 coal mines and reduced 13.61 million tons of steel capacity, said the statement. Meanwhile, 18 steel companies have slashed 6.02 million tons of crude steel production capacity and 600,000 tons of capacity for making pig iron.
The statement noted that the central government has provided funds of CNY 1.6 billion (USD 232 million) to help Liaoning government reduce overcapacity, and almost all the funds have been used to help settle laid-off workers.
Mr Li Hongwu, deputy public relations director at Benxi Steel, told the Global Times that Benxi Steel Group Co, a steel producer in Benxi, a major industrial city in the province, has learnt to adopt the model of "production on demand" this year to "reduce cost and increase profit.”
The corporation used to produce steel to maximum capacity and stockpile the extra in its warehouse, but now it only operates after receiving orders, Li said, without disclosing exact numbers.
Source : Global Times