China's Jiangsu to force steel mills to move to coast in efficiency drive

BEIJING (Reuters) - China's second-largest steelmaking province, Jiangsu, will require steel mills to move to two new areas on the coast in the next few years, according to a provincial government document, to reduce air pollution and to make the industry more efficient.

After years of getting rid of outdated excess capacity, the latest measures are the next front in the government's long-term effort to upgrade and streamline its smokestack industries.

The province plans to create two steelmaking hubs, focusing on high-quality steel production, and relocate steel mills through merger and capacity trading, the document said.

The plan was distributed on Tuesday by the Jiangsu government and reviewed by Reuters on Wednesday. The provincial government declined to comment.

The move is similar to one outlined by Hebei, the country's top steel producing province, earlier this year.

In the document, Jiangsu explicitly ordered the city of Xuzhou to cut number of steel mills in the city to under 10 by the end of 2018 from 18 currently and consolidate the remaining into one to two companies by 2020. In April, at least three steel mills were ordered closed in Xuzhou.

Small steel mills and coke plants near the Yangtze river and Tai Lake region will be eliminated by 2020.

(Reporting by Muyu Xu and Josephine Mason; Editing by Christian Schmollinger)