Chinese steel companies increase overcapacity
In fact, China's government has agreed to reduce overcapacity among steel companies - but, according to a study, they have risen even higher. A new law could turn the trend now.
Global overcapacities have been causing problems for the steel industry for a long time. The steel cookers in China are not completely uninvolved - and they know that too. But instead of shutting down blast furnaces, which are already outdated, the Chinese leadership is still pushing ahead with the expansion. This is the conclusion of a study by the environmental organization Greenpeace and the consulting firm Custeel.
Production capacity has increased by 36.5 million tonnes in 2016, according to the paper. This is twice as much as the total production of Great Britain. The capacities were extended mainly in three provinces around Beijing and had caused there for high air pollution.
The leadership in Beijing had pledged to curb excessive production by closing down inefficient factories or merging factories. According to Custeel and Greenpeace, capacity has been reduced in some facilities. In return, however, new plants were opened or shut down again put into operation. According to the investigation, closed factories must be demolished to prevent re-commissioning.
The restrictions would reduce Chinese steel production by eight percent and aluminum output by 17 percent annually.