China's biggest steelmaker Hebei Iron & Steel Group plans to slash 5.02 million tonnes per year (tpy) of steelmaking capacity during 2016-17, the company said on Friday, as the government aims to cut overcapacity in the bloated steel sector. The steelmaker will also eliminate 2.6 million tpy of ironmaking capacities in the coming two years, after it has already shut 5.6 million tonnes of annual ironmaking capacity and 6.8 million tpy of steelmaking capacity since 2008, it said on the company's website.
As part of its efforts to weather a supply glut and the slowing economy, the company also plans to raise the proportion of higher-value-added products it makes to above 70 percent by 2020 from the current 41 percent. A supply glut and record exports from China, the world's biggest steel producer, have been widely blamed by European countries and the United States for causing deep losses, mill shutdowns and worker layoffs.
Hebei Steel agreed to buy a Serbian steel plant in April as it aims to expand overseas and shift capacity abroad to weather a slowing economy at home. State-owned Hebei Steel produced 47.75 million tonnes of crude steel last year, followed by Baosteel Group at 34.94 million tonnes and privately-owned Jiangsu Shagang Group with 34.21 million tonnes, according to data from the National Bureau of Statistics. China as a whole is planning to shed 100 million to 150 million tpy of capacity from a total of 1.2 billion tpy in the coming five years as the country aims to cut overcapacity in sectors including coal and steel.
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