China steel firms turn overseas as domestic woes mount
* Crisis-hit steel sector wants govt backing as turns abroad
* Looking to escape oversupply at home
* Shift could offer some support to iron ore prices
By Ruby Lian and David Stanway
SHANGHAI, March 23 (Reuters) - Laden with debt and struggling to make money as the world's No.2 economy loses momentum, China's steel mills do not appear obvious candidates for overseas expansion.
But the country's crisis-hit steel sector is calling for strong government backing for plans to ramp up foreign acquisitions, as it looks to escape weak demand-growth and soaring environmental costs at home.
In a draft of a revised restructuring plan for the industry issued late last week, Beijing included a line saying it would support mills' efforts to buy assets abroad, with attention now turning to more detailed measures that could be announced later in the year.
"There is capacity that we can shift abroad, to regions that need it like Southeast Asia and Eastern Europe, as well as places like Indonesia and Africa where demand for steel is huge but production capacity is very low," said Deng Qilin, Chairman of Wuhan Iron and Steel Group, China's No.4 producer.
Foreign expansion by the world's biggest steel sector would offer some support to prices of steelmaking ingredient iron ore .IO62-CNI=SI, which plunged to record lows this month as Beijing ramps up environmental checks that could shut more mills in an industry where production capacity is 300 million tonnes above demand. Continuación...