Wuhan Iron & Steel will acquire Kunming Iron & Steel in a move that pushes forward the consolidation of China's fragmented steel sector, the Wall Street Journal reported. The Wuhan company's purchase of its smaller rival was announced on Tuesday by Luo Bingsheng, vice chairman and secretary general of the China Iron and Steel Association. The government is keen to remove small and inefficient operators by closure or merger with a view to creating two or three leading steel companies by 2010, each boasting a production capacity of 30 million tons per year. China's largest steel firm, Shanghai Baosteel, produced 11.9 million metric tons in the first half of the year. Efforts to rein in the domestic steel sector – which have come in the form of export rebate cuts and an increase in export taxes – are expected to see China's crude steel exports fall by 60% in the second half of the year.