Overcapacity in iron and steel industry has significantly reduced in the first half of the year, officials say.

"Our aim is to eliminate 100 million to 150 million metric tons of backward capacity within five years, but actually we accomplish that goal in two years," Xia Nong, a senior official with the National Development and Reform Commission, said on Friday.

China is expected to cut 50 million tons of steel this year, on top of last year’s 65-million-ton reduction.

Speaking at a China Iron and Steel Association conference, Xia said the total reduction would be within the five-year capacity reduction range.

In the first six months, the operation status and performance of steel enterprises in China improved on the back of policies on reducing output and eliminating inferior steel.

China has reduced steel production by 42.39 million tons by the end of May, 84.8 percent of the target for 2017.

"The companies which produce inferior steels are basically in a shut-down state," China Iron and Steel Association chairman Jin Wei said.

The Baowu Group plans to further reduce output by 5.45 million tons, while Hebei Iron and Steel Group is working towards shrinking its iron output by 1.04 million tons and steel by 3.36 million tons.

Crude steel production hit 420 million tons in the first half of the year, rising 4.6 percent year-on-year. Jin attributed the increase to the elimination of inferior steel and increased market demand.

Global steel output, excluding China, increased 4.4 percent in the first half.

Jin said that in the second half of the year, they will continue to strongly promote supply-side reform including overcapacity reduction and de-leveraging.

"It is an arduous task to prevent the revival of inferior steel and illegal construction of electric furnaces."

mengfanbin@chinadialy.com.cn