ABSTRACT
The large integrated steel plants wish to expand their capacities not only for the manufacture of crude steel, but also for the steel mill products. The public sector has added no more than 2.5 million tonnes of excess capacity, which is acceptable because steel capacities are bulky and cannot be minutely adjusted to the demand. Therefore, the private sector has to be blamed for the excess capacity built up. Excess capacities in the steel industry can emerge due to a variety of reasons, but among the most common reasons are import substitution and anticipation of higher demand in the future. Countries across the world take measures to rationalize steelmaking capacities when they are in excess. In the days after liberalization, when all controls on industrial capacities were lifted, cooperation among the various segments of the industry turned into competition, each trying to invade the other's turf; competition produced overcapacity.
