According to reports, on October 24, the Ministry of Industry and Information Technology publicly solicited opinions on the “Implementation Measures for Capacity Replacement in the Steel Industry (Draft for Comments).” The draft stipulates that the capacity replacement ratio for pig iron and steel production in various provinces (regions, municipalities) shall be no less than 1.5:1. For compliant capacity acquired through mergers and acquisitions after June 1, 2021, the capacity replacement ratio shall not be less than 1.25:1. Three circumstances allow for equal capacity replacement: 1) Projects involving major repairs or reconstruction of existing pig iron and steel equipment within the same production site, without changing the type, nominal capacity, quantity, or location of the smelting equipment, shall be replaced based on the original equipment's nominal capacity with no change in capacity; 2) Electric arc furnace projects that produce high-end special steels characterized by multiple varieties, small batches, and high technical content, using special smelting processes such as electroslag remelting, vacuum self-consumption, and vacuum induction; 3) Steel production projects established in Qinghai and Tibet. The draft also encourages enterprises to efficiently utilize scrap steel, develop electric furnace steel in an orderly manner, promote hydrogen metallurgy in conditionally suitable areas, and implement green and low-carbon technological transformations in existing pig iron and steel production equipment.

The original text outlines objectives, applicable scope, definitions of terms, key areas, capacity range, and other details regarding the capacity replacement measures and ensures compliance with national policies and environmental standards. The proposed measures include strict capacity replacement ratios, transition timelines, and mandatory separation of new construction and existing production capacities.

This comprehensive draft is part of the larger initiative to promote high-quality development in the steel industry, invigorate production, and balance market supply and demand.