China will hopefully achieve its annual steel and coal capacity reduction goals ahead of schedule this year, the country's top economic planner said on Tuesday, as local authorities have intensified efforts in recent months due to pressure from the central government.
As of the end of September, China had accomplished more than 80 percent of its goals for steel and coal production cuts, the National Development and Reform Commission (NDRC) told a press conference.
China is the world's largest producer and consumer of steel and coal. Cutting overcapacity is high on the central government's reform agenda as the two industries have long been plagued by overcapacity and have become a major drag on China's growth in recent years.
The country has vowed to cut steel capacity by 100 million to 150 million tons by 2020, including 45 million tons in 2016. China's coal reduction target is 250 million tons in 2016.
Capacity-cutting efforts have led to a recovery in both steel and coal prices. As of Friday, the steel composite price index stood at 79 points, up more than 40 percent since the start of the year.
The Bohai-Rim Steam-Coal Price Index, a benchmark index, rose to 577 yuan ($85.1) per ton last week, the highest since the start of the year.
The price rises are seen as a positive development in China's struggle to tackle high corporate debt, with overall producer prices rising in September for the first time in nearly five years.
The NDRC said it will continue efforts to eliminate unneeded production capacity in steel and coal to facilitate long-term structural change.
