Hebei Province Cuts Steel Overcapacity, Increases Production

Reuters two weeks ago: China's Hebei to cut more than 31 mln T of iron, steel capacity in 2016
China's top steelmaking province Hebei plans to cut more than 31 million tonnes of combined iron and steel production capacity in 2016, the official Xinhua news agency reported on Tuesday.

Xinhua said the province planned to cut iron making capacity by 17.26 million tonnes, and reduce 14.22 million tonnes of steel making capacity by the end of this year. It will also remove 13.09 million tonnes of coal production capacity this year.
And now the Economic Observer: 去产能半年后,河北钢铁产量全线飙涨 which translates to After Six Months of Production Capacity Reductions, Hebei Steel Output Is Soaring
Hebei Metallurgical Industry Association released statistics show that the first half of 2016, Hebei crude steel, steel, and pig iron production is 99.9 million tons, 130.5 million tons, 93.1 million tons, an increase of 2.05%, 5.14% and 2.24% respectively, an increase higher than the national average by 3.15 percentage points, 4.04 percentage points and 4.34 percentage points; iron ore increased by 5.86%, 8.06 percentage points higher than the national growth rate.

As Hebei Iron and Steel province, the current nation's most stringent to the capacity of the background, which is facing to the capacity situation has undoubtedly been very severe, but according to the above statistics show that Hebei's steel production in the first half of this year has not been reduced, but in continued to rise, and has been the country's highest.
The good news is that in 3 out of the 4, the national average is in decline.
As previously reported, the Economic Observer noticed iron and steel production in Hebei Province in recent years, statistics have found a quite a puzzling phenomenon: Hebei's annual capacity reduction is always very great, but the actual steel production has increased almost every year. In other words, over the past decade, Hebei has gone through a strange cycle of "reduce overcapacity, increase output."
Hebei recently put out an order to reduce production:
Early in Hebei Iron and Steel coal this year to May 26 of the capacity battle mobilization meeting, the Hebei provincial government and relevant city departments, companies signed letters of responsibility, set a military order: "This year reduce 17.26 million tons of iron, 14.22 million tons of steel production capacity. "
For being a military order, it pushed the limits of production, with the first batch of cuts do by the end of November and the rest at year end:
Economic Observer Online has learned that this year, Hebei capacity reduciton is divided into two groups: the first batch of 10.77 million tons of iron, 8.2 million tons of steel production capacity is expected to complete before the end of November; the second installment of 6.49 million tons of iron, 6.02 million tons of steel production capacity completed by year end.

However, the statistics from the first half show Hebei steel production did not fall, the question is whether Hebei Province's policy implementation and progress has been greatly hindered.
The industry says this is no big deal, it's a 3 to 5 year process:
In this regard, the Director of Metallurgical Research Center of Industrial Economic Development of Futures Research Centre Li Yanjie told the Economic Observer Online, "Hebei steel production in the first half of the growth rate higher than the national, but we cannot simply look at this and say Hebei Province's work is not good. "

"The reason is very simple, to resolve excess capacity target is 3 - 5 years to complete, this is the first year," said Li Yanjie.

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