CHINA aims to build three to five giant steel mills and boost the crude steel output of its top 10 steelmakers to more than 60 percent of the country’s total by 2025, the Xinhua News Agency said Saturday.

    China, the world’s largest producer and consumer of steel, also aims to boost the production utilization rate for its massive steel sector to more than 80 percent by 2017, Xinhua quoted the Ministry of Industry and Information Technology (MIIT) as saying in a draft of a revised restructuring plan.

    “By 2025, crude steel output of the top 10 steelmakers will be more than 60 percent and China will form three to five giant steel mills with strong competitiveness,” Xinhua said, citing the draft.

    An economic slowdown and chronic overcapacity have driven down steel prices to nearly 20-year lows, and saddled many steel mills with big losses.

    China has hundreds of steel mills with a total annual crude steel capacity of about 1.2 billion tons, leaving excess capacity at an estimated 300 million tons.

    The output of the top-10 steelmakers was 36.6 percent of the total in 2014, down 2.8 percentage points from 2013, MIIT said in February.

    The government has pushed for years to improve the efficiency of its fragmented steel industry, hindered by the efforts of local authorities to protect employment and economic growth.

    China is also taking tougher environmental measures to cut overcapacity and ease air pollution. Local governments have been given greater responsibility to enforce the new standards.

    As part of the preliminary plan, the government will also improve the threshold and exit mechanism for the steel sector, to achieve orderly shutdowns of inefficient steel mills that do not upgrade.

    China’s largest steel producer, the northern province of Hebei, will close all blast furnaces smaller than 450 cubic meters and electrical furnaces smaller than 40 tons, a report published on MIIT’s Hebei website said Friday.

    The move is expected to cut an estimated 57 million tons of ironmaking capacity, said industry consultancy Custeel.com.

    Hebei churned out 185.3 million tons of crude steel last year, or 22.5 percent of the country’s total. It aims to cut annual capacity by 60 million tons by 2017.

    More closures are expected to further dampen iron ore prices, which have already dropped to US$54.5 a ton this week, their lowest since the Steel Index began publishing prices in October 2008.(SD-Agencies)