China’s cuts in steel capacity last year primarily targeted mills that were already idle, doing little to reduce the exports that have fuelled trade tensions or address the blight of toxic smog, a study has found.
Beijing has trumpeted its success in shutting up to 85m tonnes of capacity in 2016. However, only about a third of that was producing steel, and the closures in operating capacity were outpaced by new plants or mills that restarted as prices rose, according to the study commissioned from consultancy Custeel by environmental campaign group Greenpeace.
Strong Chinese steel exports as domestic consumption peaks have stiffened opposition in Brussels and Washington to recognising China as a market economy under World Trade Organization rules — a status that would make it more difficult to bring anti-dumping cases. Beijing has countered by defending its efforts to cut excess capacity.