OREANDA-NEWS. November 14, 2011. China Securities Regulatory Commission will shortly review the issue related to mergers between Laiwu Steel and Jinan Steel, both publicly traded subsidiaries of Shandong Iron and Steel Group, after the boards of directors of the two companies reached a consensus on the merger plan on May 19, 2011. A source familiar with the case said the Commission will likely give a nod to the deal, the first step on the road to the restructuring of the steel industry in Shandong required by the central government.

The second step is to curtail and eliminate outdated capacity across the province, the third-largest steel-producing region over the past three years, with the focus on trimming fragmented operations in Zibo, Weifang, Binzhou, Linyi and Laiwu cities.

By 2015, the provinceбпs overall iron and steel capacity will be reduced from todayбпs 63.07 million tons to fewer than 50 million tons, with the number of steelmakers diminishing from 21 to just half a dozen.

According to a master plan, construction work on Rizhao High Quality Steel Base will start at an appropriate time. The project has designed capacity of 21.35 million tons per year, of which 11.35 million tons are newly-built. Steel operations along the coastal area will be able to produce more than 40 percent of the provinceбпs total capacity.