Since the China government started to tackle the problem of excess capacity in various industries seriously, and implemented supply side reform a few years ago, many production sites have been cracked down and closed.
Furthermore, implementation of strict environmental measures have also caused many factories to suspend their production or even close altogether. This has in turn affected the demand of industrial gases, including oxygen.
For example, hundreds of small and medium-scale steel mills have been forced to shut down for one or both of the two reasons above. In 2016 and 2017, about 65 million tonnes of steel production capacity in Hebei province (the major steel producing province) was slashed to meet targets from the central government.
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