It is reported that officials at China’s MIIT are conducting surveys at steel mills both leading state run and medium and small sized private mills. And the ministry will modify the detailed revitalization rules based on the survey results.
The move comes as several former senior metallurgical officials submitted a written report to Mr Li Yizhong head of MIIT in September, pointing out the misplays in China steel industrial policy in the past 4 years and indicating the direction for policy modifications.
Mr Liu Yongchang one of the former officials said "China’s steel policy must goes in line with actual market demand pattern, and any copy of overseas experience or voluntarily set an industrial target is set to be restricted by real market."
Mr Li also replied in affirmative to the report. The deep seated problems in past industrial policy have resulted in severe overcapacity for flat products higher low end products prices than high end products and mounting up capacities along with the tightening policy.
China 2005 steel policy set a bottom line for industrial equipments construction usable capacity of 1,000 cubic meters or above for blast furnaces, 120 tonnes of above for converters and 70 tonnes or above for electric furnaces. Meanwhile, the policy also requested the ratio of flat products and strip among the total steel products to reach 50% by 2010.
To move in speedy compliance with the instruction, new projects in recent years were almost all high end flat products for shipbuilding etc. In the mean time, some steel giants like Wuhan Steel, Handan Steel, Shougang and Tangshan Steel have voluntarily closed low end long products capacity. And smaller private mills also rush to upgrade equipments capacity to avoid being removed giving rise to the upgrading of steel capacity and breed structure in China.
Mr Liu said "Steel consumption structure in China, or a change from common products to prime products will not change before the nation completed its urbanization progress and investment spurred growth mode has not changed."
