At the request of China's Ministry of Industry and Information Technology, the China Metallurgical Industrial Planning and Research Institute (CMIPRI) has started to collect suggestions regarding the country's 12th five year plan (2011-2015) from steel enterprises. CMIPRI head Li Xinchuang said that overcapacity, mergers and acquisition, and structural adjustment continue to be the key topics mentioned by all steel enterprises. Meanwhile, the domestic steel enterprises have also been putting more emphasis on environment issues.
Mr. Li said that the issue of steel production overcapacity had already been raised in 2000, though at that time overall domestic capacity was only 100 million mt. Over the intervening ten years, he said, capacity has continued to increase and now exceeds 700 million mt.
According to Mr. Li, excess capacity is the normal result of the market economy. He commented, "We should be dynamic in the way we deal with the capacity issue. Some in the media have concluded that China has an overcapacity in excess of 200 million mt by simply deducting actual demand (less than 500 million mt) from the total steel capacity (over 700 million mt). However, it is very unscientific to calculate excess capacity simply by this plus-and-minus method."