China steel capacity reduction to cut 400000 jobs

The State Council did not specify the deadline for such cut, but pointed out that China has cut its production capacity of crude steel by more than 90 million tonnes in recent years, state-run Xinhua news agency reported on Monday.

China is targeting further cuts in crude steel production capacity by as much as 150-million tonnes and “large-scale” reductions in coal output as part of its measures to curb overcapacity and excess labour in state-owned industries.

Japan produced 105.2 MT in 2015, down 5 per cent compared to 2014, while output in South Korea decreased by 2.6 per cent to 69.7 MT during the same period. In South America, steel production showed a 2.5% decrease on 2014 to 43.9 MT as Brazil produced 33.2 MT lower by 1.9% over its production in 2014. Italian steelmakers produced 22.0 million metric tons in 2015, 7.1% less than during 2014. Production was 1,807,000 net tons in the week ending January 23, 2015 while the capability utilization then was 76.4 percent.

Annual production for Asia was 1113.8 million t of crude steel in 2015, a 2.3% y/y decrease.

Crude steel production for 2015 in North America was 110.7 million t, a decrease of 8.6% compared to 2014.

With domestic steel demand shrinking, China exported a record 112.4 million tonnes of cheap steel previous year, forcing other mills to crimp output as they struggled to compete.

Global steel production stood at 1,433.4 MT in 2010, 1,538 MT in 2011, 1,560.1 MT in 2012, 1,650.4 MT in 2013 and 1,670.2 MT in 2014, the data released by WSA showed. The AISI production report “AIS 7”, published monthly and available by subscription, provides a more detailed summary of steel production based on data supplied by companies representing over three quarters of US production capacity. China is the world’s largest producer and consumer of coal. The overall European Union share was barely changed at 10.2 percent from 10.1 in 2014.

China’s government is pushing to erode overcapacity in the steel industry, as the country aims to shift economic growth towards more consumption rather than heavy investment. Three million employees face layoffs if the steel, coal, cement, aluminum and glass industries cut production by 30 percent over two to three years, China International Capital Corp (中金公司) said in a note this month.