China's steel industry profits improve

BEIJING - China's steel industry profits improved despite capacity cut pressure in 2017, the Ministry of Industry and Information Technology (MIIT) said Wednesday.

"In the January-November period last year, combined net profits in the ferrous metal smelting and rolling sector surged 180 percent year on year to 313.88 billion yuan ($48 billion)," said a MIIT statement.

Meanwhile, operating revenue from main business in the sector increased 20 percent year on year to 5.66 trillion yuan, according to the statement.

The steel sector shall be focused on quality and profit improvement while cutting overcapacity in a bid to push forward industrial upgrades, it said.

Loss-making "zombie enterprises" shall continually be dealt with to cut inefficient capacity.

"Under no circumstance should iron and steel capacity be increased in 2018," said the statement.

The industrial sector, which accounts for about one-third of China's GDP, started to pick up in 2016 amid nationwide supply-side structural reform efforts, which include measures to trim excessive production capacity, reduce inventory, cut costs, deleverage, and addresses weak points.

Coal and steel-related companies have largely benefited from deeper supply-side structural reform, which targets reduction of outdated capacity and production costs.

China plans to eliminate 100 million to 150 million tons of crude steel capacity and 500 million tons of coal in the five years from 2016. The country completed its 2017 tasks for capacity cuts in both sectors, according to the National Bureau of Statistics (NBS).