China plans to massively cut its ferroalloy production capacity by 2010 to improve efficiency and consolidate the fragmented energy-intensive sector.

Government statistics show that only 48 per cent of existing ferroalloy production facilities are in operation but additional projects with a total capacity of 2.84 million tons are still under construction or being planned.

"The production capacity of ferroalloy should be controlled at about 17 million tons by the year 2010, a 25 per cent fall compared with last year's level," said a circular issued by seven ministries including the Ministry of Finance, the State Environmental Protection Administration of China and the National Development and Reform Commission (NDRC).

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