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China may buy up steel stocks, aid mills
(Agencies)
Updated: 2008-12-14 13:42

"Steel mills will take until March next year to absorb these high-price raw materials," Li said, adding that small and large steel mills had started making losses.

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The government could tackle the current problem with policies to help enterprises store these extra products, or the government could purchase a certain amount so that production capacity does not stand idle, Li said.

Li said China's steelmaking capacity was 600 million tonnes, but this year the country's actual output was likely to be 480-490 million tonnes. He said 15 billion yuan ($2.19 billion) could used for technical renovation, mainly in steel, next year.

"We should take advantage of the financial crisis to close or merge small steel enterprises," Li said.

He said China could also import more manganese and some other ferrous metals, such as chromium, when prices were low.

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