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China shut 320,000 mt/year aluminum, 10.96 mil mt/year steel capacity in 2016

Thursday, May 11, 2017

China closed 320,000 mt/year of outdated and obsolete refined aluminum smelting capacity last year, as well as 10.96 million mt/year of steel capacity, the Ministry of Industry and Information Technology said on its website Wednesday.

The country also shut 6.77 million mt/year of iron capacity and 5.59 million mt/year of cement, shuttering more than 1,500 small coal mines with output capacity of less than 300,000 mt/year, with aggregate coal output capacity of over 100 million mt/year.

The move is to ease surplus output capacity in the steel, coal and aluminum sectors, promoting energy saving and lowering emissions, the ministry said.

It said the elimination of outdated and obsolete output capacity is a key component of China's supply side reforms.

The ministry said more means must be used to get rid of the outdated output capacity that does not comply with state standards, to allow supply resources and the energy to develop advanced output capacity and emerging industries, boosting quality and efficiency.

MIIT said problems such as tightening domestic resources, aggravating environment pollution, as well as the weakening ecological system have hindered the building of a well-off society, so China has to eliminate the outdated output capacity in accordance with the law.

China is forecast to have a small refined aluminum surplus of 230,000 mt in 2017, state-run metals consultancy Beijing Antaike told an industry seminar in April in Beijing, noting that investment in the domestic aluminum smelting sector may alter from the high capacity expansion growth in the past years to more reasonable, stable growth.

The agency said during the 13th Five Year Plan period (2016-20), the conflict in China's aluminum smelting capacity growth and stock volume is expected to be reduced, boosting aluminum prices in the long run.

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