China plans to slash steel-making capacity by 80m tonnes

The mainland will aim to cut as much as 80 million tonnes of excess steel production capacity in the next three years to reverse a massive supply glut that has plunged much of the sector into crisis, a government official says.

In attempts to restructure its bloated steel sector, the mainland would publish a 2015-2017 action plan before June, Luo Tiejun, of the raw materials department at the Ministry of Industry and Information Technology, said.

"The main task is still to strengthen the market position of enterprises and improve the overall competitiveness of the sector," Luo told an industry forum yesterday.

According to the draft plan, the number of steel enterprises would be reduced from more than 500 to "about 300", Luo said.

Authorities would also strive to achieve zero energy growth from the sector and a cut in emissions by 2017.

In a separate development plan for the sector, the ministry said earlier this month that it was seeking to put 60 per cent of total steel capacity under the control of its 10 biggest enterprises by 2025, 10 years behind an original schedule.

The mainland has long struggled to resolve a capacity glut now totalling about 300 million tonnes of annual production, with growth-obsessed local governments encouraging local enterprises to expand as quickly as possible.