China introduces new policy on steel industry
The government of
China has officially decided to apply a new policy for the steel industry which will lead to the integration of smaller steel companies with the major ones.
The new policy, approved by the State Council on April 20, calls for steel mills to adjust product structure, reduce energy and resource
consumption, and increase the competitiveness of their products through employing high technology.
The mills are also encouraged to integrate and take measures against over
production and the country already cancelled the export tax rebate for billets on April 1, to cool down the industry.
The new policy aims to increase the share of country's 10 biggest manufacturers in
production to 50% of overall
production by 2010 and to 70% by 2020.
There are currently more than 800 iron and steel firms in
China. The largest steel makers of the country are Shanghai based
Baosteel, Beijing based Shougang Iron and Steel, Hubei based Wuhan Iron and Steel, Liaoning based Maanshan Iron and Steel and Hebei based Tangshan Iron and Steel.
Steel prices in the Chinese market have shown dramatic decreases in the last weeks and downward trend is expected to continue due to the new policy.