China’s steel sector fragmentation is worsening, an industry official said on Tuesday, citing unplanned new capacity at small mills undermining government efforts to restructure and merge companies in the huge industry, reported Reuters.
Beijing has been trying to consolidate the world’s largest steel market to curb excess capacity and pollution and has set a goal for its top 10 steelmakers to own 60% of production capacity by 2020.
However, Chinese Society for Metals (CSM) president Gan Yong said the trend is for less rather than more consolidation, saying unplanned capacity expansion at smaller mills was coming online while their big mostly state-owned rivals were struggling to do the same as quickly.
“There are some places using steel as a key contributor to economic growth as demand is robust,” Gan told Reuters on the sidelines of an industry event, adding some regions in China were not managing overcapacity controls very strictly.
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