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Greg Jordan
Officials are working on a fresh method for capacity substitution, but the specifics are still unidentified.
The existing system has been put on hold due to excess production capacity and declining prices of steel industry goods. The ministry highlighted "fresh challenges" regarding the supply-demand equilibrium within the industry.
About ten years ago, Beijing implemented capacity replacement programs in response to the increased heavy industry activity caused by stimulus measures during the global financial crisis. Nevertheless, the initiative aimed at the steel sector is producing limited results due to the rise of modern and higher capacity facilities.
Analysts suggest that competition between regions for economic growth worsens the situation, along with low demand in the local market.
MW points to the real estate market crisis as a cause of issues, since the construction industry is a significant user of steel.
source: marketwatch.com
The existing system has been put on hold due to excess production capacity and declining prices of steel industry goods. The ministry highlighted "fresh challenges" regarding the supply-demand equilibrium within the industry.
About ten years ago, Beijing implemented capacity replacement programs in response to the increased heavy industry activity caused by stimulus measures during the global financial crisis. Nevertheless, the initiative aimed at the steel sector is producing limited results due to the rise of modern and higher capacity facilities.
Analysts suggest that competition between regions for economic growth worsens the situation, along with low demand in the local market.
MW points to the real estate market crisis as a cause of issues, since the construction industry is a significant user of steel.
source: marketwatch.com
