The NDRC (National Development and Reform Commission) announced Tuesday that it would select the first series of qualified steel alloy makers, and will announce the list at the end of this year.

The policy was launched to clean up the chaotic steel alloy sector, protect the environment, and conserve energy.

According to the document, NDRC will choose the first batch of steel makers that meet previously laid out specifications stipulated in the Steel Alloy Sector Qualifications issued by NDRC. It will also complete an inspection of the many steel alloy producers in China based on total assets, sales revenue, profits, equipment, pollution, and product production capacity by June 2006.

All the companies that fail to meet the qualifications will have to upgrade production equipment and pollutant treatment facilities before the deadline set by the government. If they fail to do so, they will be cut off from power supplies, loans, and be forced to close.

China has been restricting the steel alloy sectors for more than one year, similar to its attempts to control the carbide and coking industries. However, steel alloy output is still increasing remarkably, most of which is from substandard plants. Unhealthy competition between these plants has caused prices to decline continuously on the domestic market.

The plan also aims to stabilize the steel alloy price. According to the National Bureau of Statistics, China produced 3.64 mln tons steel alloy over the first five months of this year, jumping 17.1% year-on-year. In May the output volume was 817,700 tons, up 14.10% yoy. – Interfax-China