Steel prices in China continue to rise.
In March, the country’s economic planning agency announced that it plans to slash steel capacity by 50 million metric tons. This is an effort to help address the worsening pollution in the country, as well as to control excess steel supply.
According to a report by CNBC, the Chinese government is looking to find economic growth outside of manufacturing and heavy industry, and is working on tackling overcapacity in the steel industry.
Metals analyst and Bradford Research president Charles Bradford said that China’s steel exports will likely continue to fall. The CNBC report added that companies expect higher prices to stay while the cutbacks continue.
“Output in China’s steel industry has sometimes been curtailed temporarily in order to tackle environmental problems, but we think the production cutbacks in the latest measures will be substantial compared to the other occasions,” said Nomura analysts.
Aside from seeking to reduce steel production, the economic planning agency also aimed at reducing coal by at least 150 million in 2017.
China is the world’s biggest producer and consumer of steel. The country accounts for 50.3 percent of the world’s total steel production in 2015, according to World Atlas. In 2015 alone, it produced 803 million metric tons of Crude Steel.
Some of the biggest steel producing companies in the country are state-owned, including Hebei Iron and Steel Group, Angang Steel Company, Baosteel, Wuhan Iron and Steel Corp, and Jiangsu Shagang Company. Other top steel producing countries are Japan, India, and the United States.