China steel pullback a new blow for miners – by Scott Murdoch (The Australian – January 12, 2016)

http://www.theaustralian.com.au/

One of China’s largest iron and steel-producing regions, Hebei, has announced a dramatic cut in production levels this year in a fresh blow to the Australian mining industry.

Regulators have revealed that production at Hebei, which pro­duces a quarter of China’s iron and steel output, will be slashed this year in a bid to ­alleviate the ­nation’s worsening pollution problem. Iron production will by cut by 10 million tonnes and steel by eight million tonnes this year.

Hebei governor Zhang Qingwei said steel and cement production would be capped at 200 million tonnes as the nation attempts to reduce the overcapacity that exists in the industry across the country.

Xinhua, the official news agency said Hebei was already producing too much steel, which was pushing down the global price of the commodity.

The province, just outside Beijing, is considered the industrial heartland of China and consumes most of the Australian iron ore shipped to the mainland.

“The central government has made tackling overcapacity one of its top priorities in the next five years. An overreliance on heavy industry for local growth has left Hebei vulnerable to sustained weakness in demand for capital goods both at home and abroad,” Xinhua said.

For the rest of this article, click here: http://www.theaustralian.com.au/business/mining-energy/china-steel-pullback-a-new-blow-for-miners/news-story/2f98e651e91f8d04eb62ddc1b8ef97c7

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