|China's Wuhan Steel says completed capacity cuts ahead of schedule
China's steel producing giant Wuhan Iron and Steel Group said on Tuesday it has achieved next year's target to cut 3.19 million tonnes of pig iron and 4.42 million tonnes of crude steel capacity ahead of schedule.
China has pledged to reduce crude steel capacity by 100-150 million tonnes from current level of 1.13 billion tonnes by 2020, a move designed to lift the industry out problems caused by mounting overcapacity and production. But capacity cuts so far have done little to rein in output, and Europe and the United States have accused China of dumping its excess steel overseas, hitting producers and hurting global prices.
The world's largest steel producer ramped up output to 68.51 million tonnes in October, with high profits providing operators little incentive to make cuts. "Steel mills could make a profit of at least 100 yuan per tonne," said Liu Xinwei, steel analyst at Sublime China Information Group.
"Profit could double if mills use steel scrap to make new steel. Money is driving them to operate under a high load and no-one is willing to shut down."
By 2025, 60-70 percent of China's steel output will come from 10 big steel groups, Chi Jingdong, vice president of China Iron and Steel Association, said in September.