Analysis: China tries to slow capacity build as Q1 market suffers from virus impact

摘要

China's planning entity, the National Development and Reform Commission, or NDRC, has suspended approvals of new steel capacity swap projects from the start of this year in a bid to prevent another round of steel overcapacity. However, the move may offer little to help reverse the capacity expansion taking place currently for swap projects approved in 2017-2019, as most of the replacement facilities had been completed in 2019. China approved a total of 309 million mt/year of new crude steel capacity between 2017 and 2019 through the capacity swap mechanism, of which 11% was commissioned in 2019, with a further 29% due to come on stream in 2020. The balance will be commissioned over 2021-2023.