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China's Hesteel plans 4mn t/yr capacity cut

03 Apr 2018 09:11 (+01:00 GMT)
China's Hesteel plans 4mn t/yr capacity cut

Singapore, 3 April (Argus) — China's state-controlled Hesteel is considering eliminating 4mn t/yr of crude steel production capacity this year.

Hesteel has the second-largest production capacity in China after the Baowu group. Hesteel plans this year to shut down two blast furnaces of 2,000m³ each. Most of Hesteel's operations are located in north China's Hebei province. The group produced 46mn t of crude steel in 2016.

China has set a target of shutting down 30mn t/yr of blast furnace-based crude steel capacity this year, of which a third is expected to be eliminated in Hebei. These shutdowns will enable China to meet its 2016-20 five-year economic plan of eliminating 150mn t/yr of crude steel capacity this year itself.

Hesteel also plans to further reduce steel exports this year as production will fall because of the capacity cuts.

The company plans to export around 2mn t of steel products in 2018 compared with 2.3mn t in 2017, having exported 3.5mn t in 2016.

China's overall steel exports are expected to be around 10pc lower in 2018 against the previous year because of firm domestic demand and a series of anti-dumping duties on Chinese steel imports.