China tightens rules for new steel plant

China tightens rules for new steel plant

The Chinese government will only allow new steel plants to be built on condition that their capacity is only 80% of the capacity of the old facility that was closed down in environmentally sensitive areas such as Hebei. and Jiangsu, Reuters quoted the Ministry of Industry and Information Technology (MIIT) as saying.

This decision will take effect from 2018.

MIIT's announcement also states that the new plant must be based on the size of the blast furnace, furnace and other facilities of the old plant.

Moreover, a steel company who wants to build a new factory must first shut down some existing plants. Firms with illicit manufacturing facilities are closed or financially supported and policies to close factories will not be allowed to build new production facilities.

This move proves that the Chinese government is determined to slow down the growth of the domestic steel industry. This is also a factor helping steel prices rebound in the past few days, as investors predict China's steel output will continue to fall this year.

In the five-year plan set by the government in early 2016, China is trying to cut 100-150 million tonnes of steel between 2016 and 2020.

Oanh Oanh

Source: Economics & Consumer