Jia Yinsong, inspector at the raw materials division of the Ministry of Industry and Information Technology stated that new plans for the Chinese steel industry will include new consolidation targets, and a renewed effort to eliminate poor-quality steel capacity.
This is a major attempt to bring order to the fragmented steel industry. It will include plans to consolidate the sector under the leadership of its biggest mills.
Jia said a massive new wave of infrastructural projects across China had made the government’s task more difficult, allowing smaller and less efficient steel mills to continue making a profit despite the economic downturn and a collapse in steel export volumes.
He said, "Construction steel demand has been so high that it has been harder to eliminate outdated capacity."
Reuters reported domestic steel output rose 7.5% in the first nine months of the year despite global production falling by a third, leading to concerns overseas about the state of the Chinese market.