BEIJING — China will conduct a random inspection among provincial regions that are prone to illegal steel production activities this year, an official said on March 30.
The move will be part of the country’s efforts to maintain high pressure on overcapacity in the sector, said Lyu Guixin, an inspector with the raw material department of the Ministry of Industry and Information Technology.
Methods such as satellite remote sensing and electricity use monitoring will be used to check unwanted steel production, he said at an industry forum.
As a result of slashed capacity in the past years, the steel market has recovered and rendered high profits for producers, prompting some companies to attempt to expand their capacity, according to Lyu.
China’s steel industry reported profits of 470.4 billion yuan (around $70 billion) in 2018, surging 39.3 percent year-on-year, while crude steel output grew 6.6 percent to 928.26 million tons, a record high, official data showed.
Lyu said whether the government ban on new capacity can be strictly enforced is key to consolidating the achievements of the supply-side structural reform in the steel sector.
The country fulfilled its goal of reducing the steel industry’s capacity by 100 million to 150 million tons from 2016 to 2020 ahead of schedule. By the end of 2017, steel overcapacity had already been slashed by over 115 million tons.