Fangchenggang project has already been suspended for two more months, and some of workers has been withdrawn, a Wuhan Steel official disclosed. Fangchenggang project, attached great importance by Wuhan Steel, draws into deadlock.

It is said that Fangchenggang project is halted as Guangxi province, where Fangchenggang project located, has not eliminated backward capacity on schedule. Guangdong province-based Zhanjiang project by Baosteel is given green light from the government as Guangdong province wash out nearly 10 million tonnes of steel capacities in 2009.

Guangxi-based Liuzhou Steel boost steel capacity to 8 million tonnes in 2009, and the company will develop its capacity to over 10 million tonnes in 2011. Liuzhou Steel’s capacity expansion will put great pressure on Fangchenggang project. Wuhan Steel and Guangxi province are unwilling to postpone the project.

The government will not give permission to steel projects until local government fulfill its target for backward elimination. Guangdong province eliminated 9.956 million tonnes of backward steel capacities in 2009, and Guangdong promise to continue washing out 2.40 million tonnes capacity in 2010. Guangxi province has not yet issued any commitment in backward elimination. Liuzhou Steel, largest within Guangxi province boost steel capacity by 1 million tonnes in 2009. It also post an unexpected blistering 1641.25% yearly increase in net profits of 2009.

The two adjoining projects, aim for same market, Southeast Asia and both of them produce shipbuilding plate.