The company will reduce 5.02 million metric tonnes of steel making and 2.6 million tonnes of iron-smelting capacity in 2016-17. The group produced 47.75 million tons of steel last year. Since 2008, the group has already dismantled 14 blast furnaces and 13 electric arc furnaces.

This decision comes amidst concerns that Chinese mills are restarting idled plants, threatening the nation’s attempts to reduce industrial overcapacity. Steel prices in China have also descended into a bear market after peaking in April 21. Domestic demand for steel products in China is expected to stabilise or rise slightly to 683 million tonnes, according to the China Iron and Steel Association’s estimate in April.

The country aims to cut up to 150 million tonnes of steel capacity by 2020.