Mar. 23, 2009 (Xinhua News Agency)
-- China steel industry stimulus plan to promote M&A

BEIJING, March 23 (Xinhua) Chinese government released on March 20 the Three-Year Stimulus Plan for Steel Industry, which focuses on promoting enterprise merger & acquisition, eliminating backward production capacities and controlling overall output.

The plan calls for fostering several steel giants each with annual production capacity of over 50 million tons by 2011, including Baosteel Group Corp., Anben Iron and Steel Group and Wuhan Iron and Steel Group Corp.

Further, the top five steel makers of the country are expected to possess 45 percent of the nation's total steel production capacity.

The government also urges related apartments to adjust steel import and export tax rates by the end of this month. Particularly, it hopes to increase the export rebate rates for some steel products, so as to improve the current grim export situation.

In January and February, the country exported 3.69 million tons of crude steel, down 51.8 percent on year.

Besides, the plan forecasts China's crude steel output would drop 8 percent to 460 million tons in 2009, and domestic apparent consumption would cut by 5 percent to 430 million tons.

However, Shan Shanghua, secretary general of China Iron & Steel Association, expects the overall output might be less than the expectation.

(Source: iStockAnalyst )