In response to rumors that Chinese steelmaker Baosteel Group's Guangdong Province-based Zhanjiang project is being investigated for going against the official government policy of curbing overcapacity in the steel industry, an official from the Guangdong Development and Reform Commission stated on November 27 that the planned output of the steel project in Zhanjiang is reasonable and in accordance with the national plan for reinvigorating the domestic steel industry, and so the approval procedures should be accelerated for the project.
In order to carry forward the Zhanjiang steel project, the Guangdong provincial authorities are actively engaged in eliminating dated capacities. It is reported that in the first three quarters of this year the Guangdong Development and Reform Commission shut down 2.4 million mt of dated steel capacities, with the total eliminated steel capacities reaching 9.9 million mt during the 11th Five-Year Plan period (2006-2010).
According to the official, after detailed assessment of the Zhanjiang steel project, the Guangdong government will first achieve elimination of a total of 12 million mt of dated capacity and then complete the steel project with a ten million mt capacity, with the result that total steel production capacity in the province will not see any increase.