New policies for China steel industry drafted

November 5 MetalBiz--New policies for the development of China's steel industry have been drafted by Chinese Ministry of Industry and Information Technology (MIIT), for which comments from related companies and government departments are being solicited, China Business News quoted an unidentified insider as saying.

The report says China is determined to form one or two super-scales steel complexes with production capacity in excess of 100 million tons respectively by 2015, as well as a certain number of 50-million-ton steel enterprises.

"The government's existing steel policies made in 2005 are not applicable to the new situations now," said the insider who joined the formulation of the policy draft.

China's steel policies made in 2005 indeed had boosted the fast development of small and midium steelworks in the past years, which, however, have also brought about serious problems such as environmental pollution and low concentration ratio of the industry.

By the end of 2008, China had over 1,000 steel mills, each with an average production of crude steel of less than 1mln tons annually. And the top five steel enterprises' overall output of crude steel only took up 28.5% of the country's total.

The new policies, meanwhile, will favor a higher degree of industrial concentration.

The excessively developed steel industry in the past years have also caused China to rely heavily on overseas iron ore supplies, and to have over 150,000 domestic agencies for steel and iron products.

The insider disclosed that after the related government departments and corporations give their comments, MIIT will do some modifications and then release the final version by the end of this year. The new policies are expected to take effect starting from next year.