China removed 29 steel plants from a “normal list” and urged 40 others to reform to help cut overcapacity and enhance the industry’s competitiveness, said the Ministry of Industry and Information Technology yesterday.

Most of the 29 companies were considered inefficient, engaged in illegal production or were heavily debt-laden, while some “stopped operations to echo the national call to cut supply,” the ministry said. Another 40 steel companies were urged to cut pollution and upgrade equipment.

The ministry listed 304 steel companies as normal between 2013 and 2015 based on standards in environmental protection, quality, energy consumption and safety, the ministry said. But it will “keep monitoring the industry and re-select normal companies to ensure competitiveness of the industry,” it said.

The 29 companies will have “to be seriously supervised by local authorities” although they can continue to their operations, the ministry said.

The ministry can close the companies if they fail to meet quality and are not efficient after they have been supervised.

The other 40 firms were given “yellow card” warnings after they failed to meet environmental protection or safety rules. They would be stripped of the normal classification if they don’t improve within one year.