Chinese industry and information technology (MIIT) minister Xiao Yaqing proposed at the 2021 National Industry and Information Work Conference that crude steel output should be reduced. He also said China's crude steel output should decline year-on-year in 2021.

This proposal is contrary to most analyst forecasts, which predict a slight y-o-y increase in steel output in 2021, Kallanish notes. Most private and government departments have predicted that crude steel production in 2021 will continue to grow. Han Weidong, vice president of Tianjin Youfa Steel Pipe Group, said China's crude steel production in 2021 is expected to grow by another 1%, reaching 1.1 billion tonnes (see Kallanish passim).

MIIT's proposal is to promote the development of a low-carbon, energy-saving steel industry in order to achieve the ultimate goal of carbon neutrality. However, before the official release of the new capacity replacement policy, there are few tools to reduce production capacity. As more and more updated steelmaking equipment is put into production in 2021, reducing China's crude steel output would require intensive and clear policy constraints.