[Courtesy of POSCO]
Shares in South Korea's major steelmakers rallied on Monday, helped by China’s decision to cut crude steel production by up to 150 million tonnes amid a supply glut.
The Chinese government said in a statement that the State Council, or cabinet, led by Premier Li Keqiang, made the decision at a meeting on Friday.
The government will also increase policy support including special awards to companies restructuring to eliminate overcapacity and affected workers steel industry, according to the statement posted on the Chinese government’s main web portal.
POSCO and Hyundai Steel gained about five percent Monday. Their Asian peers like Japan’s Nippon Steel and China’s Baoshan Iron also rallied on the news.
China's crude steel output fell 2.3 percent to 803.8 million tonnes in 2015 from the previous year, the first drop in more than three decades as the economy of the world's top producer slows.
China's government is pushing to fight overcapacity in the steel industry, as the country aims to shift economic growth towards more consumption rather than heavy investment.
China's economy grew 6.8 percent in the fourth quarter from a year earlier, the weakest since 2009, suggesting that the world's second-largest economy continued to lose steam late in the year.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
