Negative fragmentation of China's steel industry

President of the Chinese Society of Metallurgists, Gang Yong, said the fragmentation of China's metallurgical sector is worsening as unplanned new capacity in small plants undermines the government's efforts to restructure and merge companies in a huge industry.

Gang Yong said the trend is for less, rather than more, consolidation, saying the unplanned expansion of capacity in small businesses will begin at a time when their large, mostly state-owned assets were struggling to do the same as possible. faster. Gang Yong said that "in some places steel is being used as a key driver of economic growth as demand is high, adding that some regions in China are not very strict about overcapacity."

Gang Yong warned of growing competition in high-end products. He said that "there are indications of overcapacity in stainless steel, electrical steel, and sheet steel for automobiles."

The Ministry of Industry and Information Technology recently warned that the sector still has problems with increasing illegal capacity, including new factories not approved by the government. and those that were supposed to be closed in the exchange of capacities.

Beijing is trying to consolidate the world's largest steel market to curb overcapacity and pollution, and has set a goal for its top 10 steelmakers to own 60% of capacity.