Of all the industrial metals used to build modern China, none are bound as closely to the country’s contemporary history as steel. Its manufacture was once a symbol of national pride—and an imperative to repair a war-ravaged country.

Keen to put China on par with industrialized nations, Mao Zedong in the 1950s stoked the national obsession, calling for an iron smelter in every backyard. Farmers melted down many of their earthly belongings, including door knobs and cutlery, to meet the government’s steelmaking targets.

Today, steel is out of favor in China. In the five years up to 2017, Beijing wants 80 million metric tons of old steelmaking capacity wiped from existence nationwide. The amount comes to 7% of total current capacity. Official data indicate China is on track to achieve that target.

The bosses of steel plants, once ardently courted by party bureaucrats and business leaders, told reporters three years ago that they no longer felt welcome in Beijing – or even their hometowns. Mills are under pressure to move beyond city limits, accused of polluting the environment where once they were seen as providers of lifelong job security. Shougang Group Corp., once based in Beijing, had by 2009 been relocated to the coastal port of Caofeidian. Baosteel Group Corp., once the darling of Shanghai, has had to consolidate its operations in the southern province of Guangdong.

What happened?

Some of it is the maturing of environmental policy. As Chinese got wealthier, they became more aware of the health risks of the smog generated by the thousands of steel mills strewn across the country. Public pressure grew on the government, and President Xi Jinping last November unveiled historic climate targets to reduce coal use that would inevitably hit the steel sector, one of coal’s largest buyers.

Another reason relates to China’s economic slowdown – and a debt-laden backlash rooted in the expansive ambitions of wealthy mills.

Six years ago, to fend off the effects of the U.S. subprime mortgage collapse, Beijing flooded its banking system with trillions of yuan and told banks to lend aggressively. One of the prime beneficiaries was the steel industry. As state-owned giants, they already enjoyed close ties with the nation’s largest banks. From 2008 to 2014, Chinese mills added about 540 million tons of steelmaking capacity, by now totaling 1.2 billion tons – 14 times the annual steel output of the U.S.

Consumption didn’t keep pace. By 2014, it was becoming obvious even to government economic planners that China’s steel demand wasn’t growing. As mill oversupply flooded the market, Chinese steel prices fell 55% from 2012, and haven’t stopped falling yet.

Mills are now under pressure as China’s economy slows to its weakest growth level in 25 years. The industries that feed their furnaces have already been sinking, in part due to global oversupply as well. Iron ore quarries in northern mining counties have become ghost towns. Coal mines are disappearing. Steel mills are finding they canno longer pay for the debt they so eagerly took on.

Steel producers used to brush off government orders to slim down their operations – but no longer. In March, one of China’s largest steelmakers, Anshan Iron and Steel Group Co., gave orders to shut down one of its midsize units, Pangang Chengdu Steel and Vanadium Co. The closure will likely pave the way for more such shutdowns, analysts say.

Now, the government is thinking of innovative ways to make the industry more efficient. One is to push steel factories overseas. Another, announced last year, is to letoffshore investors take stakes in what was for most of the past decade a sector off-limits to foreign investment.

So far, there have been no takers.