China issues revised steel ‘capacity swap’ guidance draft
This week China’s Ministry of Industry and Information Technology (MIIT) released a draft version of the “capacity swap” scheme for the domestic steel industry, listing the detailed guidelines to adhere to for the installation of all the new domestic iron- and steelmaking capacities, and this long-awaited document has been viewed by market insiders as the new code of conduct to shape the country’s steel industry in the future.
The term “capacity swap” refers to the removal of old or inefficient iron- or steelmaking capacities by steelmakers and the installation of new facilities of similar capacity, a crucial measure in the central government’s strategy to rein-in the country’s bloated steel industry. Beijing is also eager that benefits to the industry’s structure achieved by the removal of over 150 million tonnes/year of excessive iron and steel capacity over 2016-2018 and 140 million t/y of substandard induction furnace capacity in 2017 are safeguarded, Mysteel Global notes.