(Yicai Global) July 22 -- Steel and coal capacity at China's centrally administered state-owned enterprises is to be cut by 10 percent over the next two years, Mr. Xiao Yaqing, director of the State-Owned Assets Supervision and Administration Commission, said.
Over the next five years, central SOEs should cut their steel and coal capacity by around 15 percent, the SOASAC announced at a work conference last month. With the exception of professional steel makers, coal miners and thermal coal companies, all other coal-related central state enterprises should exit the coal industry.
China's coal and steel sectors have accumulated an excess capacity in the wake of the economic slowdown both in China and around the world.
China's steel capacity is already close to 1.2 billion tons, according to incomplete statistics. Baosteel Group, China's second-largest steelmaker, said this month that it plans to cut capacity by 9.2 million tons over the next two years, equivalent to about a quarter of its steel production last year.
Shanxi province, China's biggest coal-producing province, plans to cut its overcapacity by 20 million tons this year and by 100 million tons before 2020. This amounts to a tenth of the country's total capacity reduction goal.