Overproduction is taking its toll - China is suspending approval procedures for new steel mills.

Within just a few years, the People's Republic has achieved absolute dominance in steel production. Today, more steel is produced there than in all other countries combined. That's quite a figure.

Traditional steel producers in countries like Germany and Italy have come under enormous pressure in recent years. And the climate is also starting to sweat. The Chinese steel sector is responsible for almost five percent of global CO2 emissions.

To address the overcapacity and the poor climate record, in recent years new iron and steel plants have only been approved in exchange for shutting down older facilities. And so far this year, only low-CO2 steel plants have been approved. Considering the weakening demand on the domestic market, however, overproduction has not been curbed. As a result, the pressure on competitors is likely to stay high. It remains to be seen how strict the climate criteria will be following the revision of the approval process.

Sources: https://www.bloomberg.com/news/articles/2024-08-23/china-puts-brake-on-new-steel-capacity-with-industry-in-crisis