An insider from China's Ministry of Industry and Information Technology (MIIT) has disclosed that the ministry is carrying out checks on a second batch of domestic steel enterprises to see whether they conform with required standards in the Chinese steel sector. The work in question will be completed by the end of November this year, with the Chinese steelmakers that fail to meet standards to be blacklisted. The MIIT thus aims to tackle the steel overcapacity issue in China. The standards in question include standards relating to the environment, efficient energy use, use of modern technology, product quality and production safety.
The company official stated, "As of April 2 this year, 45 large and medium-sized steelmakers in China, including Baosteel, Shougang, Shagang and others, have been subject to checks. The total output capacities of the given steelmakers account for 41.4 percent of total steel output capacity in China." The insider added that the MIIT has now started to check a second batch of steelmakers, following which steelmakers accounting for 80 percent of total Chinese steel output capacity will have been examined to see if they meet the required standards.
As for the steel enterprises which comply with the standards, the MIIT will work with China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), with the Ministry of Environmental Protection (MEP) and the National Development and Reform Commission (NDRC) to provide support for their development, especially in regard to cross-regional mergers and reorganization and technological upgrades, with the aim of optimizing industrial structure and regional distribution.
With regard to the steel enterprises which do not meet the standards, the MIIT will use economic measures such as differential electricity pricing, tight credit and loan policies and legal restrictions to force them to withdraw from steelmaking.