The World's leading steel corporations are speeding their pace in entering China's market through establishment of joint ventures and direct product export, according to industry insiders.

A typical example is a joint-venture hot galvanized plate facility which has recently started operation in Anshan, northeast China's Liaoning province.

The US$180 million project is funded jointly by the Angang Group Corporation, China's No. 2 steel manufacturer, and the Germany-based Thyseen Krupp, the second carbon steel supplier in Europe. It is able to produce 400,000 tons of hot galvanized plates annually, according to Liu Jie, general manager of Angang group.

Besides the largest hot galvanized plate project, a joint venture will be built in Shanghai by Baosteel from the east China metropolis, the world's largest steel producer Arcelor, which is based in Europe and Nippon Steel from Japan to produce cold rolled plate for high-end motor vehicles.

Meanwhile, the largest steel producer of the Republic of Korea,Pohang Steel has launched a cold rolled steel plate joint venture in partnership with Bengang in Benxi, Liaoning province.

The largest steel producer in the world, China has increased remarkably its steel imports in recent few years.

Statistics from the China Steel Industry Association show that last year China bought 30 million tons of steel from abroad, a year-on-year net increase of 12 million tons.

China is unfolding a massive reform of its steel industry to cut back on small-scale mills and concentrate production in more powerful plants.

According to Luo Bingsheng, vice president of China's Steel Industry Association, in 2003 China had 13 steel producers each with a production capacity of more than five million tons, yet they accounted for only 45 percent of the country's total annual steel output. By contrast, the leading five steel groups in Japan made up over 90 percent of the country's total output.

It is reasonable for the share of the 13 big steel makers in China's total steel production to reach 80 percent, said Luo.

In this regard, two leading steel enterprises from northeastern China, Benxi Steel and Anshan Steel, are thinking of a merger scheme, which will create a second steel giant with an annual output of more than 20 million tons, following the Baosteel based in Shanghai.

The concentration of steel production capacity will help rationalize the extremely high steel price at home, which is believed to have protected disadvantageous steel enterprises, according to some economists.

(Xinhua News Agency July 6, 2004)