Steel Companies Forced to Control Output

Heads of six large iron and steel companies were summoned to Beijing recently to discuss with government officials on measures to curb steel production. These companies failed to control steel output in January.

The six companies, from Hebei, Jiangsu, Zhejiang, Fujian and Sichuan provinces, over-produced 62,200 tons of steel in January, 9 percent more than the projected quota.

The State Administration of Metallurgical Industry (SAMI) held a meeting for these enterprises to help them work out effective measures to reduce output for the following months.

Pu Haiqing, SAMI director, said the administration will track closely on their progress in curbing steel output on a monthly basis, and warned that if they failed again next month, the government will "pose sanctions" on them to force a reduction.

Pu said that the sector failed to control steel output in 1999 due to the reluctance of a number of enterprises. " If one enterprise fails, all previous efforts exerted by the whole sector will become abortive and the projected annual goal will just be empty words", he noted.

Officials with the State Economic and Trade Commission also pointed out that no enterprise will be exempt from the duty even though they may have all sorts of difficulties, especially in the first half of this year. The government will consider the extremely difficult enterprises in the latter half year, if progress has been made and domestic market improves.

China plans to control steel output within 1.1 billion tons this year, some 10 percent less than the previous year.

Statistics from the National Bureau of Statistics show that China produced 10.03 million tons of steel in January, down 4.01 percent from the same period of last year, but still exceeding the projected quota by 180,000 tons.

The reluctance of a few large enterprises and most of the small and medium-sized enterprises has made the task increasingly difficult to achieve. Enterprises apart from the 46 key steel companies had their output exceeding the quota by 481,600 tons or 48.2 percent in January, sources said.

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