The China Iron and Steel Association (CISA) stated on Monday that steel mills in north and northeastern China should stop enlarging their production capacities during the 12th five-year plan period (2011-15).
Meanwhile, analysts have commented that the development trend in China will see steel mills being relocated to coastal areas for financial and environmental reasons. Zhang Lin, a senior analyst from Beijing Lange Steel Information Research Center, said, "The move will be beneficial to the environment because steel production is a process which consumes huge amounts of water. Under pressure from fewer resources and worsening environmental pollution, it is wise to make this change."
Northern China's steel mills produced a total of 170.89 million mt in 2010, accounting for 27.26 percent of national production. Mr. Zhang said northern and northeastern China have long been the key steel production bases in China. It is part of a strategic plan to move production to the coastal areas to ensure the sustainable development of the industry, he added.
The CISA has also asked Chinese steelmakers to diversify their range of products, and contribute more towards the development of high-speed railways, urban metro lines, off-shore oil exploration and renewable-energy industries.
CISA chairman Deng Qilin said the Chinese steel companies should make greater efforts in research and development for new products in order to satisfy the requirements of the domestic market.