The National Development and Reform Commission (NDRC) said it plans to cap China’s crude steel output at 460 million tons in 2009, and 500 million tons in 2010, Reuters reported. The announcement, posted on the NDRC’s website, also revealed plans to close 25 million tons of steel-making capacity and 72 million tons of iron-making capacity in the next three years. In addition, it urged consolidation of China’s major steel makers. Shanghai-based Baosteel Group will take over Baotou Steel, while Liaoning-based Anben Iron & Steel will merge with Panzhihua, a northwestern mill. Further consolidation will be seen in Tianjin municipality and Shanxi province. Analysts have cautioned that the capacity of China’s steel industry far outstrips demand; while the government’s stimulus package is seen as providing a short-term demand boost, it also runs the risk of worsening overcapacity in the long term.