BEIJING, Oct 24 (Reuters) - China on Friday unveiled a proposal for a more stringent steel capacity swap plan, 14 months after it paused the old programme that failed to rein in rampant expansion, leaving the industry with overcapacity that hit profitability and sparked protectionist backlash.

China halted its existing steel capacity replacement programme from August 23, 2024.

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The addition of new steel capacity in the key areas, the transfer of steel capacity from non-key areas to key areas and the capacity transfer among key areas are strictly forbidden, China's Ministry of Industry and Information Technology said in a statement.

Key areas refer to the Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta region, and the Fenwei Plain, according to the statement.

Provinces and cities that the country has clear targets for total steel capacity are not allowed to accept the transfer of capacity from other regions, it said.

At least 1.5 metric tons of old steel capacity is needed to exit for building every-tonnage new capacity.

More efficient utilization of scrap steel to develop the cleaner electric-arc-furnace-based steelmaking in an organized way and the development of hydrogen metallurgy in appropriate regions are encouraged, it added.

https://www.reuters.com/world/asia-pacific/china-proposes-more-stringent-steel-capacity-swap-plan-curb-overcapacity-2025-10-24/