China will no longer approve the expansion of steel production capacity projects this year and next

According to the Chinese government website on the 17th, according to the "Opinions on Accelerating the Structural Adjustment of the Iron and Steel Industry" issued by the General Office of the State Council, China will no longer approve and record any steel projects with expanded production capacity until the end of 2011. The opinion also pointed out that it is necessary to further increase the concentration of the steel industry and establish a sound mechanism for the formation of imported iron ore prices.

The opinion suggests that the steel industry is the industry with the greatest potential for energy conservation and emission reduction, and it is necessary to suppress the excessive growth of steel production capacity as the top priority in implementing energy conservation and emission reduction. Except for projects approved by the state to carry out preliminary work, no steel projects with expanded production capacity will be approved or filed before the end of 2011. All new construction and renovation projects shall be examined and approved in strict accordance with the law. The Development and Reform Commission should take the lead in organizing the clean-up of steel projects built since 2005.

It is necessary to further increase the concentration of China's steel industry, and cultivate 3-5 large-scale steel enterprise groups with strong international competitiveness and 6-7 strong strengths. Strive to increase the proportion of steel production in the top 10 steel companies in the country in the country's production from the 44% in 2009 to more than 60%. Support for mergers and acquisitions of enterprises should be strengthened in terms of project approval, land supply, loan credit, capital market financing, and budgetary expenditures for state-owned capital management.

Establish long-term stable iron ore import channels. Relevant industry associations and chambers of commerce should strengthen consultations with various steel production and trading enterprises, and establish and improve the formation mechanism of imported iron ore prices. Relevant departments should actively create conditions, support domestic users and foreign suppliers to strengthen coordination and cooperation, establish long-term stable, mutually beneficial cooperation, and maintain a reasonable price level of imported iron ore.

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