en.Wedoany.com Reported - The Ministry of Industry and Information Technology recently issued a revised version of the "Measures for the Implementation of Steel Capacity Replacement" (hereinafter referred to as the "Measures"), further tightening capacity replacement requirements and strengthening differentiated policy guidance and supervision. This marks the official resumption of steel capacity replacement work, which had been suspended since August 23, 2024, and will accelerate the reduction and quality improvement of the steel industry.
The steel capacity replacement policy is an important measure to advance supply-side structural reform in the steel industry, consolidate and enhance the achievements of capacity reduction, and prevent "involution-style" competition. Zhang Longqiang, President of the China Metallurgical Information and Standardization Institute, analyzed that the steel industry has shifted from a phase of incremental development to one of reduction, making it necessary to further tighten the policy "gate" that strictly controls new steel capacity. According to publicly available data on capacity replacement, from 2016 to 2024, the capacity replacement plans announced nationwide involved the construction of approximately 380 million tons of ironmaking capacity and 430 million tons of steelmaking capacity, with a corresponding exit of about 420 million tons of ironmaking capacity and 470 million tons of steelmaking capacity. While steel capacity has been reduced before and after replacement, the fundamental supply-demand contradiction in the steel industry has not been resolved due to factors such as the large capacity base and improvements in technology and production efficiency.
Following the revision, the new version of the "Measures" specifies: the replacement ratio for ironmaking and steelmaking capacity nationwide shall not be less than 1.5:1, and the replacement ratio for mergers and acquisitions shall be increased to not less than 1.25:1; capacity replacement between different enterprises will be gradually phased out; the validity period of capacity replacement plans is 24 months; and the construction of equipment for stainless steel enterprises is regulated, with the number and volume of induction furnaces for melting alloys in stainless steel enterprises required to match the needs of their electric arc furnace or converter processes.
Zhang Longqiang believes that the new version of the "Measures" further reduces total steel capacity by uniformly increasing the reduction replacement ratio, setting a time limit for splitting capacity, and limiting the scope of replaceable capacity. For special processes, the new version clarifies the methods for verifying construction and exit capacity, limits the capacity and number of supporting induction furnaces, further standardizes the verification standards for smelting equipment capacity, effectively controls new equipment and capacity, and improves capacity governance.
Xiao Bangguo, President of the China Metallurgical Industry Planning and Research Institute, stated that the new version of the "Measures" imposes rigid constraints on the implementation progress of capacity replacement projects, clearly stipulating that the validity period of steel capacity replacement plans announced by various regions is uniformly 24 months. Within two years from the date of announcement, project filing, energy conservation review, carbon emission assessment, and environmental impact assessment must be completed, and construction must officially commence. A reasonable transition period is provided for plans announced before August 23, 2024, but the two-year deadline remains rigid, reflecting the policy orientation of "drawing a line between old and new, and strict management."
To promote industrial transformation and upgrading, the new version of the "Measures" further encourages high-end and green development of enterprises by setting differentiated replacement ratios. For example, electric arc furnace steelmaking projects using special smelting processes such as electroslag remelting and vacuum induction to produce high-end special steel, and projects adopting low-carbon metallurgy, hydrogen metallurgy, and other low-carbon process technologies with a carbon reduction ratio of no less than 60%, are allowed to implement equal replacement.
Increasing industrial concentration is a necessary path for the steel industry to transition from large to strong. To further promote mergers and acquisitions, the new version of the "Measures" gradually phases out capacity replacement between different enterprises, setting a two-year transition period for such replacements; after the transition period, capacity integration and transfer can only be achieved through substantive mergers and acquisitions. Zhang Longqiang stated that the new version of the "Measures" is conducive to mobilizing the enthusiasm of enterprises for joint restructuring, promoting the concentration of capacity in advantageous enterprises, and increasing industry concentration.
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