SHANGHAI, Feb. 24 (SMM) -- The Shangdong provincial government released the steel industry restructuring guidelines recently. According to the guidelines, Shandong Iron and Steel Group will complete its consolidation with Rizhao Steel and Qingdao Steel in 2013; Shandong province will reduce steelmaking capacity by 10 million mt and cut the number of steelmakers from 21, to five or six by 2015.

According to the guidelines, Shandong province will control total steel production, eliminate inefficient capacity, conduct consolidation and reorganization, optimize the layout, enhance the quality and conserve energy and reduce emissions in an effort to improve the core competitiveness of the steel industry and build a resource-conserving, environment-friendly industry in the future. 

By 2013, Shandong Iron and Steel Group will complete its consolidation with Rizhao Steel and Qingdao Steel, and other steel mills in the province should make a breakthrough in regional reorganization to significantly improve the province's steel industry concentration. In the meantime, the relocation of Qingdao Steel will be in full swing, and the preparatory work including planning, design and project approval for building a steelmaking base at Rizhao Port will be completed, with the construction of the project to be in full swing.

By 2015, the Shandong provincial government will try to reduce steelmaking capacity by 10 million mt, making total steelmaking capacity within 50 million mt. The steelmaking capacity of Jinan Iron & Steel and Laiwu Iron & Steel owned by Shandong Iron and Steel Group will be cut from current 10 million mt to 5.6 million mt and 6 million mt, respectively. The steelmaking base in Rizhao will take shape, and the relocation of Qingdao Steel will be completed, and the proportion of the province's coastal steel capacity will increase to above 43%. In addition, the number of steelmakers in Shandong will be cut from 21, to five or six.

According to the latest 12th Five-Year Plan for Steel Industry, the proportion of crude steel output at China’s top ten steel enterprises will increase to above 60% by 2015, and Steelease believes that this goal is not difficult to achieve, but it is more critical for the actual effect of the M&A of steel enterprises. Therefore, Steelease believes the Chinese government will also accelerate the industrial upgrading of regional steel enterprises, enhance the development level and consolidate the achievements of completed M&A of steel groups while speeding up the M&A process in 2012 and in the following several years.