China vows to downsize steel and metals capacity

China vowed on Monday to further downsize its steel and base metal capacities as massive oversupply raised challenges during the ongoing global financial crisis that has slashed demand for industrial products.

China, the world's largest steel-making country, aimed to eliminate outdated pig iron making capacity of 72 million tonnes and crude steel making capacity of 25 million tonnes by 2011, the country's top planning body said in a statement.

The country will eliminate small-sized blast furnaces for iron production and convertors for steel production as scheduled, the National Development and Reform Commission said.

China's steel sector, with rampant growth fuelled by an economic boom that ran out of steam in the past few years, saw its total capacity exceed 600 million tonnes at the end of 2008, when it only produced 500 million tonnes due to weakened demand.

China, also the world's top base metal consumer and a major producer, will eliminate outdated copper smelting capacity of 300,000 tonnes, lead smelting capacity of 600,000 tonnes and zinc smelting capacity of 400,000 tonnes by 2009.

It will also cut outdated aluminium capacity of 800,000 tonnes by the end of 2010, the planning body said

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