The Ministry of Industry and Information Technology clarifies the removal of steel and cement from the “cap” list: Steel companies are transforming into capacity‑advantaged enterprises.

Chi Jingdong, vice president of the China Iron and Steel Association, shares a similar view. He told a reporter from the Daily Economic News: “Today, steel production processes are becoming increasingly green, and the ongoing improvement in the quality of steel products is also driving energy conservation and environmental protection.”

　　Turning to the current pressures facing the industrial economy, Huang Libin acknowledged that overcapacity remains a particularly salient issue. He noted that the capacity‑reduction targets set under the 12th Five-Year Plan were achieved one year ahead of schedule, and that the primary task for the 13th Five-Year Plan is to address and resolve excess production capacity.

　　Most steel companies have met environmental protection standards.

　　“In the past, industries such as steel, cement, and electrolytic aluminum were labeled as ‘two high, one resource’—that is, high‑energy‑consumption, high‑pollution, and resource‑intensive sectors. But after several years of concerted effort, they should now be rightly recognized as having transformed into energy‑saving and environmentally friendly industries, with competitive, high‑quality production capacity,” said Huang Libin.

　　Regarding Huang Libin’s claim that the “cap” has been lifted for industries such as steel, Chi Jingdong, vice president of the China Iron and Steel Association, told a reporter from the Daily Economic News that the notion of the steel industry being a high‑energy‑consumption sector was itself not very scientific. “Steel is not simply an energy‑intensive industry; during the smelting process, it can also generate secondary energy. Today, roughly 70% to 80% of the energy required for steel production is supplied through the conversion of secondary energy sources,” Chi Jingdong said. He also noted that ten years ago, producing one ton of steel consumed 1.5 tons of standard coal, whereas now it takes only 500 kilograms.

　　Regarding the claim that the steel industry is highly polluting, Chi Jingdong stated that, following several years of technological upgrades and modernization, most steel enterprises have largely met existing environmental standards. At present, only a few specific pollutants remain relatively abundant—for example, nitrogen oxide emissions still pose a significant environmental challenge. However, even abroad, denitrification technologies are not yet fully mature.

　　In addition, Chi Jingdong noted that in recent years, improvements in the quality and added value of steel products have contributed to energy conservation and environmental protection. For example, today’s steel products are becoming increasingly lightweight, and when used in automobiles, they help reduce energy consumption.

　　Positive factors are emerging in capacity reduction.

　　When discussing the pressures currently facing the industrial economy, Huang Libin noted that structural adjustment and capacity reduction are long-term, arduous processes, but positive developments have already begun to emerge.

　　Using the electrolytic aluminum industry as an example, he said: “Over the past few years, thanks to our persistent efforts to restructure the sector, we have seen significant improvements this year. In the first half of the year, consumption in the electrolytic aluminum industry grew by more than 8%. Moreover, capacity utilization has largely rebounded to above 80%, and profitability turned positive in May and June. For the past three years, the industry was mired in losses across the board; however, through unwavering structural adjustments, a turning point has now emerged.”

　　However, Huang Libin acknowledged that pressure remains in industries such as steel, cement, and glass. According to the data he cited, from January to May, the coal industry’s sector-wide profits fell by more than 60% year on year, while the cement and glass sectors saw profit declines of over 60%, and the metallurgical sector experienced a 36% drop.

　　Huang Libin stated, “Many of the difficulties facing the economy are directly linked to overcapacity.” Taking the steel industry as an example, Chi Jingdong told reporters that, from an industry perspective, China currently has 1.2 billion tons of steel production capacity, while demand stands at only around 700 to 800 million tons.

　　In response to the issue of overcapacity, local governments have been actively phasing out outdated production capacity in recent years. Huang Libin stated, “Thanks to sustained efforts over the past few years to eliminate obsolete capacity, the target set for the 12th Five-Year Plan was achieved a year ahead of schedule last year. The task of weeding out outdated capacity is now essentially complete, and the primary focus of the 13th Five-Year Plan is to address excess capacity.”

　　Huang Libin stated that, during the 13th Five-Year Plan period, the primary approach to reducing excess capacity will be stringent control over new capacity, with a focus on implementing equivalent‑or‑reduced‑capacity replacement for newly approved projects. He also highlighted other measures, such as corporate mergers and reorganizations, and encouraging leading enterprises to expand overseas, as means of addressing overcapacity. Furthermore, the reporter from the Daily Economic News noted that Huang Libin’s proposal to alleviate excess capacity by boosting domestic effective demand had previously received relatively little attention. He added: “We will promote the use of steel structures and green building materials in rural areas, thereby encouraging the adoption of high‑quality steel and aluminum products.”

　　Chi Jingdong told reporters that today, more than 90 percent of China’s buildings are constructed with reinforced concrete, whereas in developed countries, steel structures account for 50 to 60 percent of the built environment. Promoting the use of steel structures not only helps absorb excess production capacity but also enables material recycling, thereby minimizing environmental waste and potentially driving China’s steel industry toward a higher‑value‑added structure.

　　Shedding the “high‑carbon, high‑pollution, resource‑intensive” label

　　Huang Libin, Deputy Director-General of the Bureau of Operation Monitoring and Coordination at the Ministry of Industry and Information Technology, stated that in the past, industries such as steel, cement, and electrolytic aluminum were often labeled as “two high, one resource”—that is, high-energy-consuming, high-polluting, and resource-intensive sectors. “After several years of concerted efforts, these industries have now been rightly reclassified, as they have transitioned into energy-saving and environmentally friendly sectors and have become sources of competitive capacity.”