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China is intensifying its efforts to regulate domestic steel production in a bid to rebalance supply and demand amid a weakening market, according to officials from the China Iron and Steel Association (CISA) during a first-quarter briefing, as reported by Mysteel Global.
Wang Bin, Director of Planning and Development at CISA, emphasized that managing steel output remains a vital instrument for stabilizing the industry, especially in the absence of more robust regulatory mechanisms. He noted that strict control over steel production—both at the local government and enterprise levels—is essential to maintain market stability.
Wang urged the industry to shift its focus from expanding production capacity to prioritizing high-quality development. He also called for production controls to be aligned with environmental performance, energy efficiency, and carbon emission goals.
To support this transition, he advocated for a performance-based evaluation system. Such a system would allow the most advanced and efficient producers to operate at full capacity while encouraging the phase-out of outdated and inefficient facilities. It would also help channel government support and resources toward more competitive enterprises.
The CISA official further highlighted the need for a new system to manage steel capacity, integrating government oversight, industry self-regulation, and market-driven mechanisms. In support of this, the Ministry of Industry and Information Technology had already suspended the previous steel capacity exchange mechanism in August 2024. Updated regulatory standards were rolled out in early 2025.
A revised plan for implementing these capacity exchange guidelines is also in development. Wang reiterated his opposition to capacity trading between unrelated steel enterprises, warning that it encourages speculative behavior. Instead, he advocated for capacity integration to occur only through substantial mergers and acquisitions, which could help streamline the industry and reduce excess competition.
China’s broader goal is to restructure the steel sector by curbing overall production. In March, the National Development and Reform Commission (NDRC) signaled plans to reduce output, although no official figures have been disclosed. Market analysts speculate the annual cut could reach up to 50 million tons.
