Overcapacity campaign faces its toughest challenge this year

China's effort to cut overcapacity in steel and coal is expected to face its most difficult challenge this year, although the target may look small compared with the previous two years, analysts said.

The newly announced Chinese government report said that in 2018, China plans to cut steel production capacity by around 30 million metric tons, and coal production capacity by approximately 150 million tons.

In 2017, the plan was to reduce steel production capacity by around 50 million tons and to shut down at least 150 million tons of coal production facilities. In 2016, the target was about 45 million tons of steel capacity and 250 million tons of coal capacity.