China's top 10 steel mills will be able to contribute 60% of the country's total steel output according to the country’s 12th Five-Year Plan.
The plan covers the period 2011-2015 period. It highlights the priorities of increasing the concentration of the scattered steel industry, upgrading technology, eliminating obsolete capacity and encouraging steel companies to move to coastal bases, said an official from China's steel lobby, China Iron & Steel Association (CISA)
China has been encouraging large mills to merge with rivals to create more cohesive steel groups in an effort to address overcapacity, pollution and a disadvantageous position in price negotiations for iron ore.
The central government aims to create several steel giants with a production capacity of more than 50Mt/y through mergers and acquisitions to reverse the situation.