CISA calls on industrial discipline on the alert of new overcapacity
2019-07-31 16:58:18 [Print]
On July 29, Wang Wei, the former director of raw material industry department of Ministry of Industry and Information Technology (MIIT) claimed on the standing committee of China Iron and Steel Association (CISA) that, the newly emerged illegal capacity and excessive growth of output has become an prominent problem in iron and steel industry.
According to CISA, the whole nation plans to build iron and steel projects with crude steel capacity of nearly 200 million tons after the preliminary estimation based on the released capacity transformation projects in recent years, which may trigger the new round of overcapacity of iron and steel against the backdrop of continuously declining demand on iron and steel from our national economy.
Wang Wei pointed out that with the promotion of capacity reduction, the effectiveness of iron and steel industry has improvements but the risks of newly emerged illegal capacity increases. According to the results of MIIT's investigation and research, some enterprises tried to increase their smelting capacity under the cover of ferroalloy-making and comprehensive usage of resources; some enterprises built abnormal blast furnaces and converters that exceeded the approved size. Besides, some enterprises played "numbers game" to increase iron and steel capacity in disguised form in the capacity transformation; a certain number of enterprises that produce steel products with iron scraps even show a sign of rise from ashes.
Wang Wei said, "Reducing the iron and steel capacity and bolstering the supply-side reform aims at eliminating difficulties and enhancing development in the industry, not reform for reform's sake. Iron and steel industry was listed as one of the two trail industries to reduce capacity and realize supply-side structural reform in 2016. In the past three years, the reduced crude steel capacity totaled 150 million tons and the shut-down capacity totaled 140 million tons among enterprises that produce steel products with iron scraps. In the future, electric furnace steel-making will be the major task for the restructuring of Chinese iron and steel industry. Wang Wei also revealed that MIIT and National Development and Reform Commission are under joint research to formulate the guideline to develop short process steel-making and plan to release the guideline next year.
According to CISA, the whole nation plans to build iron and steel projects with crude steel capacity of nearly 200 million tons after the preliminary estimation based on the released capacity transformation projects in recent years, which may trigger the new round of overcapacity of iron and steel against the backdrop of continuously declining demand on iron and steel from our national economy.
Wang Wei pointed out that with the promotion of capacity reduction, the effectiveness of iron and steel industry has improvements but the risks of newly emerged illegal capacity increases. According to the results of MIIT's investigation and research, some enterprises tried to increase their smelting capacity under the cover of ferroalloy-making and comprehensive usage of resources; some enterprises built abnormal blast furnaces and converters that exceeded the approved size. Besides, some enterprises played "numbers game" to increase iron and steel capacity in disguised form in the capacity transformation; a certain number of enterprises that produce steel products with iron scraps even show a sign of rise from ashes.
Wang Wei said, "Reducing the iron and steel capacity and bolstering the supply-side reform aims at eliminating difficulties and enhancing development in the industry, not reform for reform's sake. Iron and steel industry was listed as one of the two trail industries to reduce capacity and realize supply-side structural reform in 2016. In the past three years, the reduced crude steel capacity totaled 150 million tons and the shut-down capacity totaled 140 million tons among enterprises that produce steel products with iron scraps. In the future, electric furnace steel-making will be the major task for the restructuring of Chinese iron and steel industry. Wang Wei also revealed that MIIT and National Development and Reform Commission are under joint research to formulate the guideline to develop short process steel-making and plan to release the guideline next year.
