Reuters reported that China's Baoshan Iron & Steel Co Limited expects to receive regulatory approval for its coastal Zhanjiang project this year, despite government resolve to extend a fight against overcapacity.

Mr He Wenbo chairman of Baosteel said that "We will try to obtain approval this year and are starting to build a raw materials dock."

Chinese steel mills are encouraged to build Greenfield projects on the coast to lower production costs through proximity to imported raw materials, but Beijing has also been reluctant to approve more steel projects in the face of huge overcapacity.

Baosteel Group set up wholly owned Zhanjiang Steel in April 2011 for the project in Guangdong province, with a target capacity of 10 million tonnes.

Guangdong Steel planned to invest CNY 35 billion to develop the project. The company, a JV established almost three years ago, is 80% controlled by Baosteel Group, with Guangzhou Iron & Steel and SGIS Songshan Co owning the remaining 20%.

Another leading mill, Wuhan Steel Group, plans to build a 10 million tonne per year project in Guangxi province, which has yet to receive regulatory approval.

(Sourced from www.reuters.com)