China's Hebei province cuts steel production in March

China's largest steelmaking province, Hebei, produced 17.43 million tonnes of crude steel in March, down 3.5 percent from a year ago. This is due to government policies to tackle air pollution in local factories, which are already under pressure from slow demand and a lack of funds.

According to the National Bureau of Statistics, Hebei province's steel production accounted for 24.8 percent of total national output for the month, declining slightly in the first two months of this year, but still higher than in the last two months of 2013, when it the share dropped below 20 percent.

The provincial governor said last month that Hebei should cut its total steel production capacity by 60 million tons by 2017 as part of a program to reduce air pollution in northern China. This significant reduction is planned to be compensated by improving production efficiency, creating more progressive steelmaking processes and displacing outdated equipment, which is the source of air pollution.

Already, at least 16 of the province's steelmaking firms have stopped production as a result of financial problems. The slump in steel production in Hebei was planned against the backdrop of significant growth in metallurgy in Jiangsu province, which is located near Shanghai and is due to launch new capacities.