China's steel sector has stabilized in 2018, but a new round of oversupply as well as malicious competition should be prevented in the domestic market, an industry leader said on Wednesday.
This year is the most stable period for the growth of China's steel sector since the global financial crisis a decade ago, as steel prices are steady in a reasonable range and industrial quality has improved, domestic news site cnstock.com reported on Wednesday, citing Liu Zhenjiang, secretary-general of the China Iron and Steel Industry Association.
Liu noted that supply-side reform has helped promote the domestic steel industry, adding, however, that the sector is likely to encounter more challenges in the fourth quarter of 2018 and onward into 2019.
He said that relevant departments should try to gauge the impact that the US will exert on the domestic steel sector, warning that China should be properly prepared.
The industry should strengthen self-discipline in capacity control and try to secure a basic balance between supply and demand, Liu was also quoted as saying in the cnstock.com report.
On Tuesday, nine government agencies including the Ministry of Commerce (MOFCOM) and the Ministry of Finance rolled out a series of rules detailing the regulation of government policies for the steel industry, in an effort to prohibit any support for illegal capacity in the sector, read a statement on MOFCOM's official website.
Local authorities should not release any measures hampering the elimination of steel capacity that does not meet certain standards and does not help to clear the industry of "zombie" companies, the statement said.
China plans to cut 30 million tons of redundant steel capacity and 150 million tons of coal capacity by year-end.
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