According to Mr Jia Yinsong deputy director general of China's National Development and Reform Commission capacity expansion in low end steel is still growing at an excessive rate.

Mr Jia while speaking at an industry forum in Beijing proposed several ways of encouraging consolidation and higher end production for the country's steel industry, including urging local governments to work more closely with Beijing to bring about restructuring of the highly fragmented sector. He outlined other measures also including phasing out outdated production capacity, raising entry barriers, and implementing differential water and electricity rates for steelmakers based on their efficiency.

Mr Jia also called for the establishment of more regional production centers, such as the new industrial base in Caofeidian, in northern China's Hebei province. He singled out Hebei as being ahead of the pack in terms of complying with NDRC calls for consolidation.

(Sourced from Mysteel.net)