"We are studying the opportunities amid a wave of global industry consolidation," Wang said in an online question-and- answer session with investors, a copy of which was released yesterday. Wuhan is facing limitations in China because of its "location, resources and government policies," Bloomberg News reported Wang as saying.

China's drive to slow investment in the industry is spurring Wuhan Steel, Shougang Corp and other steel makers to look at building mills elsewhere. Zhu Jimin, chairman of Beijing-based Shougang, said this month he is studying sites in Southeast Asia, where demand for the metal is also surging.

"Although the domestic market is the biggest and is growing fast, a lot of Chinese mills are considering building plants overseas, largely because the government's push to curb domestic expansion," said Zhou Xizeng, Beijing-based chief analyst with Citic Securities Co.
China issued regulations in July 2005 to limit steel makers from building blast-furnace plants to try to tackle domestic overcapacity. A company proposing to build a plant must close obsolete capacity, the government has said.

Chinese regulators have also yet to approve Wuhan Steel's proposed 10 million-ton-a-year plant in the southern Guangxi Zhuang Autonomous Region, the company's local partner, Liuzhou Iron & Steel Co, said last week.

Wuhan Steel is based in Wuhan city, the capital of China's central province of Hubei.

Takeovers in the global steel industry have been accelerating. Mittal Steel Co bought Arcelor SA last year for US$38.3 billion to form Arcelor Mittal, the world's largest steel maker.