The Chinese iron and steel industry still has many out-of-date production capacities. Even though the relevant government departments have intensified efforts to eliminate such dated capacities, satisfactory results have still not been achieved. At present, the majority of new capacities have not been approved, due to the lack of effective long-term supervision and inspection.
As stated by the China Iron and Steel Association (CISA), medium width strip mills without approval in China account for a capacity of 30 million mt. There are 33 approved medium plate and heavy plate mills in China, constituting 47 percent of total domestic capacity, while 43 medium plate and heavy plate mills representing 53 percent of production capacity have not been approved.
All in all, 70 percent of the strip mills emerging in recent years have not been approved, as estimated by the CISA. Xiong Bilin, deputy director of the Industry Coordination Division of China's National Development and Reform Commission (NDRC) has stated that such capacities are illegal and will be eliminated.