China's steel industry is likely to see more consolidation in 2009 after the financial crisis threw it heavily into the red, a senior manager told Xinhua on Tuesday.
General manager of Jinan Iron and Steel Company, Li Changshun, said the industry will speed up structural readjustment to raise quality and eliminate obsolete factories.
The China Iron and Steel Association said 62 percent of its 71 large and medium-sized steel producers posted losses totaling 29.1 billion yuan (4.26 billion U.S. dollars) in 2008.
More mergers and acquisitions are expected, with smaller steel companies seeking shelter with stronger market players.
SOUNDBITE: Zhang Xiaogang, General manager of Anshan Iron and Steel Company "High-energy, resource-consuming, and heavy-polluting enterprises are the major weakness in China's steel industry, and they are the main targets for merger."
Baosteel, China's leading steel maker, announced early this month its plan to join with Hangzhou Iron and Steel Group Company in taking over and restructuring a third firm, Ningbo Iron and Steel Co.
Zhang Xiaogang, General manager of Anshan Iron and Steel Company, said the scattered structure of the industry has weakened China's voice in setting world iron ore prices and prices for steel products.
Zhang said mergers and acquistions are the key to helping the steel industry get out of difficulties, and these will also provide new opportunities for the industry.
Xinhua News Agency correspondents reporting from Beijing. (XHTV)
