Players in China's steel sector are being urged to keep a cool head and sharpen their competitive edge in order to maintain the industry's healthy and sustainable development.

Industry leaders and specialists delivered this message Sunday at the 2004 China International Steel Congress, a high-profile gathering of representatives from the industry's major players, experts and researchers from both home and abroad.

They told the gathering that the nation's apparently fast growing steel output capacity does not pose the threat of over-exporting, as domestic demand remains strong, although the government has tried to put the brakes on excessive speculative investment in the sector.

Convened biennially by the China Iron and Steel Association (CISA), an influential trade organization of domestic steel companies, the event is expected to generate new ideas on the steel industry's development.

"The domestic steel industry still has much room for development until at least 2010," said CISA Chairman Wu Xichun, predicting that domestic steel consumption volume may reach 310 million tons by that time. China's steel demand stood at about 257 million tons last year, of which around 37 million tons came from imports.

"China won't be a net exporter of steel products at least in the foreseeable future," he said, adding that some people's concerns about China's possible large-scale exports are based on their overestimates of increases in the domestic steel industry's output capacity.

Wu said forecasts of industry's development largely hinge on several factors, including the variety of steel products' variety, cost competitiveness and other conditions such as raw materials, energy supply, transportation and environmental protection.

Domestic steel companies should accelerate the upgrading of their technologies through innovation and co-operation with overseas counterparts in order to achieve an efficient, effective and environmentally friendly performance, said Wu.

CISA welcomes the central government's efforts to cool down the red-hot industry by curbing the growth pace of huge investments - especially from many small companies. "Overcapacity would be a disaster in the end," he said.

(China Daily June 7, 2004)