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January 21, 2017

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China’s steel output gains in 2016

CHINA’S steel production grew last year, boosted by a rebound in price and supply amid a national campaign to cut overcapacity, the National Bureau of Statistics said yesterday.

Domestic crude steel output rose 1.2 percent from 2015 to 808.4 million tons in 2016, and output of steel products gained 2.3 percent to 113.8 million tons, the bureau said in a report.

Chinese steelmakers produced more last year as prices of steel rebar surged 77 percent, the China Iron and Steel Industry Association said, adding that a rebounding demand also added fuel to the fire.

But the result “doesn’t conflict with the fact that China has successfully trimmed steel capacity last year, as most of the cut in capacity came from the idle blast furnaces,” said Wang Guoqing, research director at, a steel industry website.

China launched the supply-side reform in the industry to phase out low efficient steel mills, most of which have been on the edge of bankruptcy as they suspended production for a long time. The capacity of such entities accounted for 74 percent of the 45 million tons which China claimed to have cut last year, said in a research report.

Domestic steel consumption was estimated at around 670 million tons last year, up 0.9 percent from 2015, the China Metallurgical Industry Planning and Research Institute reported last month.

Despite the government’s call to reduce overcapacity in the steel industry, the policies to encourage the development of industries such as automobile, real estate and infrastructure bolstered demand for steel, which is the main raw material for these industries.

The auto industry consumed 56 million tons of steel, 3.7 percent more than 2015, the institute said.

But the overcapacity in China’s steel industry still exists, and the National Development and Reform Commission, the country’s top economic planner, said: “While 2016 marked the year to cut steel overcapacity, 2017 will be the pivotal year to improve the supply-demand relation.”


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