China to cut steel capacity by 100-150 mln tonnes in 5 years

China plans to cut steel production capacity by 100 million tonnes to 150 million tonnes over the next five years, the State Council,

China's cabinet, said on Thursday.

No new steel projects will be licensed, outdated plants will be closed, and "zombie" companies -- those which have ceased operations

but have not formally gone bankrupt - eradicated.
Resettlement of workers will be a top priority with steel production to offer compensation to redundant workers and pay their unpaid

wages.Training and employment services will be provided to help the unemployed find work and unemployment benefit will be paid to

those who lose their jobs.China's steel industry, the world's largest, has been saddled with overcapacity for years. The glut has been

felt even more in the past two years as world steel demand contracted.

According to China Iron and Steel Association, crude steel production capacity is about 1.2 billion tonnes with output falling 2.3 percent

last year to 804 million tonnes.