China to cut steel capacity to tackle glut

China will cut crude steel capacity by 100-150 million tonnes (mt) within the next five years to tackle a glut that has dragged prices down to multi-year lows and saddled firms with huge debt, the country's cabinet said on Thursday. The State Council also said it would ban new steel projects and work to eliminate mills which have stopped producing but not formally shut down.

The China Iron and Steel Association said the country's total annual crude steel capacity now stands at 1.2 billion tonnes. Total production reached 803.8 mt last year, down 2.3 per cent, the first drop since 1981.