China to renew bid to curb steel industry sprawl

Saturday, 29 Jan 2011
According to the Ministry of Industry and Information Technology said China will renew its push to reduce the production capacity of its sprawling steel industry as its largest mills continued last year to make only limited progress in the industry consolidation.The country produced 626.7 million tonnes of crude steel last year an all time high that refocused attention on limited effectiveness of policy tightening and government's attempts over the years to curb the industry size.

Mr Zhu Hongren Ministry of Industry and Information Technology spokesman said the 10 largest steel mills raised their combined contribution to the country's total steel output to 48% last year from 45% in 2009, and a total of 179 million tonnes of obsolete steel and iron capacity was shut down.He said that "We should keep tight control of expansion in the highly energy consuming and polluting industry."The ministry data shows that the top 10 steel mills' crude steel output increased slightly in volume terms last year. At 45% of 2009 output, the top 10 mills would have produced 259.6 million tons of crude steel. At 48% of 2010 output, their production would have been 300.8 million tonnes.

In addressing the reach of the government's policy, Mr Zhu sought to make a distinction between permitted and illicit output-capacity additions. He said that "In referring to overcapacity, we are not talking about mere 'expansion of capacity,' but blind expansion."He added that China's steel output capacity has reached 700 million tons. He also said the cement industry, beset by similar issues, also saw output rise last year by 15.5% to 1.8 billion tonnes.(Sourced from online.wsj.com)