SHANGHAI Chinas Jiangsu province has unveiled a plan to cut 7 million tonnes of steelmaking capacity between 2014 and 2018.
The steel sector was among four industries that the eastern coastal provinces government singled out Dec. 29 as facing overcapacity.
This follows a similar move by Hebei province, Chinas steel production hub, which recently announced a plan to cut 15 million tonnes of capacity in 2014.
Jiangsus provincial government described the capacity of its steel industry as large but of low concentration, with market participants competing mainly via price wars.
The government will push for consolidation in the region, and three to four steel producers with more than 10 million tonnes of capacity are expected to be formed over the next several years.
Meanwhile, the government will raise the proportion for the production of advanced steel products to more than 50 percent, it said.
In addition, the government wont provide any financial support to boost capacity in the four industries.
Jiangsu province, which produced a total of 75 million tonnes of crude steel in the first 11 months of 2013, is the second-largest steel production region in China, just behind Hebei province, according to a local data provider.
Major mills based in the region include Jiangsu Shagang Group Co. Ltd., the countrys largest private mill; Zhongtian Steel Group Co. Ltd.; and Jiangsu Yonggang Group Co. Ltd.
A version of this article was first published by AMM sister publication Steel First.