Beijing pushes for further metal industry consolidation

The Chinese government is targeting 2,255 metal production companies that must dismantle facilities and reduce capacity to further consolidate the industry, the Wall Street Journal reported. The biggest target of the 18 metals sectors reviewed was the iron and steel industry, with 96 companies producing 31.2 million metric tons of iron-foundry capacity and 58 companies with 27.9 million tons of steelmaking capacity identified for cuts. China’s steel sector – which produces about half of world supply – is widely thought to be bloated, fragmented and inefficient, hampering government energy intensity reduction targets. But while the total target for the sector capacity cuts is significantly lower than last year, that may reflect official attempts at a more realistic goal – some analysts believe that 2010 reduction numbers included capacity that had already been eliminated.