(CBN - Global) May 17 -- Several large Chinese steelmakers with advanced equipment will jointly move production capacity to Brazil, according to news website Jiemian, trimming China's overcapacity as well as helping steel companies avoid anti-dumping and countervailing trade investigations by Europe and the US.
The companies, including Ansteel Group Corp. and Magang Group Holding Ltd., plan to transfer 10 million tons of steel production capacity to the South American country, the report said, citing Mr. Zhang Shengsheng, general manager of steel investment company China-Brazil New Energy International Investment. Three million tons of output capacity will be moved in the first phase.
China is introducing measures to reduce overcapacity in its coal mining and steelmaking sectors. In its five-year plan to 2020, the government aims to reduce steel production by 150 million tons. The country's steel industry accounts for over half of the world's output of the metal. Last year, output was cut for the first time since 1981.
Mr. Chen Derong, general manager of Shanghai Baosteel Group Corp. [SHA:600019], has said that implementation of the 'One Belt, One Road' strategy -- an initiative aimed at creating new economic links between Asia, Europe and Africa -- and the saturated domestic market, will force Chinese steelmakers to invest overseas, and the Chinese steel market is about to see net capital outflows.