Beijing: China is trying to solve the overcapacity problem in the steel industry by forbidding new production capacity going into the market, said Zhang Gaoli, vice premier of the State Council.
China’s steel production volume accounts for nearly half of the total volume in the world. The government has already suspended several new steel projects; however, it is not forbidding projects using new capacity to replace old capacity.
China’s steel producers are also reselling some of the iron ore inventories back into the market.
Traders estimate that Chinese steel mills have resold 2m to 3m tonnes of iron ore bought under long-term contracts from miners into the spot market. Jiangsu Shagang Group is one of the most active sellers. [17/05/13]
