29 August 2024 – China has declared an end to capacity expansions in steel production and is no longer allowing any new announcements for replacement capacities. And prices for stainless steel in China have stabilised and demand is rising.
China battles steel overcapacity
The Chinese Ministry of Industry and Information Technology announced on 23 August 2024 that all plans to replace steel capacities would have to be suspended from 23 August. According to the ministry’s announcement, violations of this announcement will be considered illegal new steel capacity and will be reported and penalised accordingly.
Rules for replacement steel capacity to be tightened
Having already issued stricter rules on replacement capacity, environmental regulations and emissions reduction in 2021, the Chinese government has thus stepped up its efforts to reduce overcapacity and put a stop to further uncontrolled growth in the Chinese steel industry.
According to Chinese media, the ministry is already working on an update for the plan to make the Chinese steel industry and its necessary replacement capacities fit for the future. This apparently already includes a massive reduction in overcapacity.
EU runs out of arguments regarding overcapacity
The European Commission will probably soon run out of arguments regarding Chinese overcapacity. However, Brussels is certainly already endeavouring to find a new enemy with regard to steel overcapacity. This is likely to be India, which intends to significantly expand its steel industry in the coming years.
Stainless steel prices in China have stabilised
Analysts currently assume that stainless steel prices in China have stabilised to the extent that there is no longer any room for downward pressure. With the coming peak season and the restocking of important raw materials (e.g. nickel) that has already begun, stainless steel prices could soon be expected to rise. According to market reports, demand already seems to be picking up.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
