There have been growing calls for action from the Chinese authorities in recent months as steel prices plunged amid a worsening glut. Demand has fallen more than 10% since 2020, and many analysts say the industry will need to shrink to fit an economy that’s becoming less reliant on steel-intensive construction.
China has abruptly suspended its system for approving new steel plants, as the government responds to a deep demand slump that’s crushed industry profits and fueled a surge of exports.
Beijing has for years required the elimination of existing capacity as a condition of building new plants. Those rules will no longer apply from Friday and the government will develop an alternative program, the Ministry of Industry and Information Technology said in a statement.
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