China government-run steel, coal firms to cut 10 percent of capacity in two years: regulator

SHANGHAI (Reuters) - China’s central-government run steel and coal firms will cut capacity by around 10 percent in the coming two years, and by 15 percent by 2020, as part of their efforts to tackle gluts in the sectors, the state asset regulator said on Friday.

The State-Owned Assets Supervision and Administration Commission (SASAC) held a meeting with the 25 coal and steel firms under its jurisdiction at the end of June, it said.

The SASAC-run firms include China’s biggest coal producer, the Shenhua Group, as well as the Baoshan Iron and Steel Group (Baosteel) and the Wuhan Iron and Steel Group, which have recently announced plans to restructure.

China aims to cut 100-150 million tonnes of annual steel production capacity and 500 million tonnes of coal production capacity in the next three to five years, amid waning domestic demand and a long decline in prices.

Reporting by David Stanway; Editing by Ed Davies