China's Hebei to cut iron, steel production in 2016

The northern province of Hebei, which produces one-fourth of China's steel, on Friday pledged to slash iron and steel production to tackle problems like over-capacity and air pollution.

Production of iron will be reduced by 10 million tonnes and that of steel by eight million tonnes in 2016, Xinhua reported.

Production of steel and cement will be capped each at 200 million tonnes, and flat glass at 200 million weight cases by the end of 2020 to alleviate over-capacity, Hebei governor Zhang Qingwei said.

The central government has made tackling over-capacity one of its top priorities in the next five years.

An over-reliance on heavy industry for local growth has left Hebei vulnerable to sustained weakness in demand for capital goods both at home and abroad. Some steelmakers were operating at thin margins and more were operating at a loss.

Production of steel, cement and glass have also been widely blamed for the worsening air pollution in the region.

The province has previously said it will cut a combined 160 million tonnes in steel, cement and coal, and another 36 million weight cases in glass by 2017 compared with 2013 levels.

Cutting overcapacity weighs on Hebei's economic growth, which came in at 6.5 percent during the first nine months of 2015, making it increasingly challenging for the province to meet the seven percent target set for the whole year.