China has introduced sweeping capacity replacement plans over the past couple of years, compelling producers to upgrade their steel production facilities to raise utilization rates and to reduce emissions.
China will add a total of 71.05 million tonnes per year in new crude steel capacity in 2020 to replace old capacity of 84.92 million tpy.
This will result in a crude capacity cut of 13.87 million tpy in 2020, bringing the total down from the current 1.15 billion tpy to 1.14 billion tpy.
New hot metal capacity will total 65.12 million tpy, replacing old facilities with 83.14 million tpy of capacity, and that will result in a reduction of 18.02 million tpy from the current 1.05 billion tpy, bringing the total to 1.03 billion tpy.
“The capacity replacement will cause...