No new steel expansion should be encouraged for the next three years in a bid to curb excessive capacity, minister of Industry and Information Technology Li Yizhong said in an interview. China has a steel capacity of 660 million tons, excluding 58 million tons of capacity under construction while actual demand is just 470 million tons. Steel overcapacity is threatening to bring the industry to a “dead end.” Concreted measures to bail the industry out in a guideline which is drafting include: continue to eliminate outdated capacity according to the 11th Five-year Plan that has confirmed 100 million tons of pig iron and 50 million tons of steel as outdated capacity to be scraped by 2010; further promote mergers and consolidation in the industry; and discourage any new expansion work for the next three years.