China Suspends New Steel Plant Approvals

China has suspended its system for approving new steel plants due to a significant slump in demand that has severely impacted industry profits and led to increased exports. The Ministry of Industry and Information Technology announced that the longstanding requirement to eliminate existing capacity before approving new plants will no longer be enforced, as the government seeks to develop alternative measures. This pause in the capacity replacement program, which mandates that new capacity must equal the removal of older capacity, is intended to address new challenges facing the steel industry, exacerbated by a prolonged property crisis and slowing infrastructure investment. While the halt may not immediately affect ongoing projects, it is expected to limit overall steel capacity expansion in the medium to long term. Analysts have mixed opinions on whether this suspension will sufficiently tackle the issue of overcapacity, with some suggesting more drastic measures are necessary.