Developments in China's steel supply-side reform and production reduction

The latest update on China's steel supply-side reform and production reduction progress indicates ongoing developments:

The National Development and Reform Commission (NDRC) has mandated each province to submit their production reduction targets by June 20.

Current confirmed reduction targets include:

• Fujian: 3.5 million tons (already announced)
  
  
• Hebei: 15-17 million tons
  
  
• Shanxi: 2 million tons
  
  
• Other regions are continuously updating their targets.
  
  

Detailed implementation plans are expected by mid-July. Special attention will be given to enterprises rated C-class or worse for environmental protection during the winter heating period, potentially requiring them to reduce production by over 50% compared to usual standards.

The current situation resembles that of last year, with speculation in July about production restrictions and final confirmations later in the year. Discussions and meetings on production restrictions are ongoing in various provinces. However, the specifics of targets, the extent of production pressure, and implementation methods remain unclear. Caution and continued observation are advised.

In the period from January to May 2024, China's crude steel production declined by 1.4% year-on-year, totaling 438.61 million metric tons.

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