The overcapacity problem that China's steel industry has long faced is still difficult to effectively alleviate in the short term. According to the China Iron and Steel Association, the annual crude steel output will reach 680 million tons, an increase of about 44 million tons, an increase of 6.9%. Officials from the Ministry of Industry and Information Technology said that during the "Twelfth Five-Year Plan" period, the standards for the elimination of backwardness in the steel industry will no longer increase. “From January to October this year, ferrous metal mining, smelting and rolling processing (steel) completed fixed assets investment of 3,136.3 billion yuan, an increase of 18.9%, while the growth rate of the same period last year was only 1.6%, and the industry's capacity expansion accelerated. The region is still a hot spot for investment, but it is also a region with more overcapacity," said Zhang Changfu, secretary general of China Steel Association. Zhang Changfu made the above remarks at the annual meeting of the "Net" held recently. He revealed that from January to October this year, the output of crude steel for key large and medium-sized steel enterprises (members of China Steel Association) increased by 9.7% year-on-year, while the crude steel output of small and medium-sized enterprises increased by 20.1% year-on-year. SME production accounted for 14.1% of the country's total output, an increase of 1.1% over the same period last year. The above data shows that the capacity control that has been emphasized all along has hardly played a role in the steel industry, especially for SMEs. A recent survey by the reporter in the Hebei Province, the country's largest steel-producing province, found that the expansion of private enterprises was very common from the end of last year to this year. At present, China's blast furnace floor area ratio is the standard for the elimination of enterprises, but in fact, last year, the small blast furnaces below the standard have completed new renovation and expansion, and the elimination of backwardness is actually a disguised form of forced large-scale equipment. Some industry insiders bluntly said, "Capacity elimination is a catalyst for capacity expansion." In response to the above problems, Zhang Dejun, Director of the Steel Division of the Raw Materials Division of the Ministry of Industry and Information Technology, said at the meeting that during the "Twelfth Five-Year Plan" period, the standards for the elimination of backwardness in the steel industry will no longer increase. "It is no way to set the threshold for elimination by using the equipment volume as the standard. The main basis for the future is the energy consumption index, and the more the production capacity is eliminated, the more it is eliminated." Zhang Dejun said. It is worth noting that not only the Bohai Rim region, but also the western region represented by Xinjiang, investment in metallurgical projects including steel is also “hotâ€. “Our policy pressure on steel capacity expansion is relatively small, and new capacity is basically not limited too much,†said a senior executive of a steel listed company with a factory in Xinjiang.
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