Baosteel to Enforce Zhanjiang Project for Growth, Ms. Xie

Chairwoman Xie Qihua of Baosteel Group said to Japan Metal Bulletin that the firm will control majority of Shaoguan Iron and Steel with 4.5 million tonnes of raw steel output capacity and enforces Zhanjiang integrated steel project with annual 10 million tonnes of capacity as a part of growth strategy. Ms. Xie said the firm is now studying for Zhanjiang project including environmental assessment and land development plan. She said the plan is closely tied with shut down campaign for outdated capacity and small blast furnaces. She said more than 90 million tonnes of outdated capacity should be shut down. The firm will expand the raw steel output capacity to 30 million tonnes for the existing operations by 2008 and targets 40 million tonnes eyeing 50 million tonnes through the expansion plan and domestic consolidation. Ms. Xie said the firm tries to become world no.3 steel maker by 2010. Ms. Xie said the firm will keep the partnership with Arcelor Mittal through Baosteel-NSC/Arcelor Automobile Steel Sheet when Nippon Steel started close tie-up with Arcelor Mittal and Mr. Lakshmi N. Mittal, who is president of Arcelor Mittal, shows willingness for cooperation in future business with Baosteel. On Chinese overcapacity concern by world steel industry, Ms. Xie, who is chairwoman of China Iron & Steel Association, said Chinese steel output growth is to meet higher demand. She said Chinese government doesn’t encourage the expansion and imbalance of supply and demand should be cleared by shutdown. She said world industry shouldn’t be over pessimistic for growing Chinese steel export and China imports large volume of high end products instead of low end products export. She said lower tax return for steel export will curb Chinese export and she expects the government would reduce the tax return step by step.