China, which accounts for more than half of global steel production, plans to prevent producers from increasing it above 2022 levels in light of the limited recovery after the pandemic.
Bloomberg mentioned from familiar sources that China plans to notify steel producers at the end of this month, and it did not call for harsh cuts in production. However, the move reflects official concerns about tepid demand.
A cap on production might help push prices up by reducing oversupply, but it might not be well received by companies already suffering from falling profits and disrupted production.
China is the world’s largest producer and consumer of steel, but production has been declining annually since hitting a record high in 2020.
The measure would help Beijing advance its green ambitions as it struggles to reduce carbon emissions and meet climate commitments, as the steel industry accounts for about 15% of emissions in the country.
