High-level steel production encountered repeated investment following the oversupply of primitive steel products in China, Economic Information Daily reported Thursday.

According to the newspaper, the newly-increased capacity of the steel industry reached 40 million tons in the first three quarters, resulting in historical high steel stock in September. Steel stock in September grew 42.9 percent over January.

When domestic steel works invested in high-end installations like 120-ton converters and product lines of hot-tolling and cold-rolling sheets, they were filling up the vacancy of the market. But demand lags far behind after the equipment was put into production.

At present, there are about 10 newly-invested product lines of hot-rolling and cold-rolling steel sheets in the country.

A medium-sized steel plant in Jinan, capital of east China's Shangdong Province, alone possesses three 120-ton converters and a product line of hot-rolling sheets to be put into production next year, with a working cold-rolling product line.

Inspired by rising price of high-level steel products, many steel works have been enhancing investment in the area since early this year.

China issued a development policy for the steel industry in July to guide the development of the sector, but the implementation of the policy might encounter hindrances from local governments because the benefits of the local officials might be adversely affected, said the newspaper.

Source: Xinhua