Big fish to eat small with the new steel policy
China's National Development and Reform Commission stated that the new steel policy would be announced on Wednesday (July 20) at a press conference. It has been almost two years that China is trying to shape its steel policy in order to establish a robust development in the steel industry. The measures taken by the government in April, May and June are all a part of the new policy in fact. The new policy aims at consolidating the industry so that the largest 10 steelmakers of the country would account for 50 percent of the overall steel production by 2010. Therefore, it is in fact the smaller and medium sized companies that are worried about the new policy as they face the danger of being removed from the market. The policy has already started to show its impact with the occurrence of the declining trend in domestic steel prices. Major companies may cope well with the current price trend but small steelmakers will eventually have to leave the market. Yet, the output level in the market will not change much as the new production capacities of major steelmakers are coming into operation one by one.