Due to the overcapacity and low profitability of iron and steel industry, the Ministry of Industry and Information Technology is formulating an "Action Plan". According to the plan, the capacity of iron and steel industry, which has already been constricted, will be further reduced by 80 million tons in next three years. ANBOUND research team believes this is a bad news for the whole iron and steel industrial chain in China. This is a severe and profound industrial adjustment under new normal. Because of this, many enterprises will go bankrupt and many banks will bear more bad debts. However, such suffering is necessary for market clearing.