Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Jiangsu-based Shagang group has signed an intention agreement to acquire stakes in the state-owned Anyang Iron and Steel. Through this arrangement, Shagang will participate in mixed-ownership reform which promotes China’s strategy to limit the number of large steelmakers in the country.


Anyang Iron and Steel is a listed steelmaker and Angang group is the controlling shareholder with 66.78pc share capital. Angang group operates under the State-owned Assets Supervision and Administration Commission of Henan Province. The intention agreement was signed between the Shagang Group and Angang group, on May 13. Shagang will conduct a due diligence evaluation before finalizing the acquisition.  


China’s steel industry consolidation strategy as part of the supply-side reforms aims to consolidate 60pc of the nation’s steelmaking capacity in the hands of the top 10 steelmakers by 2025 from the current 40pc. Large consolidated steel entities are better equipped to lower carbon emissions and achieve carbon neutrality, while a mix of private and state ownership allows for more investments in technology upgrades.


Angang has an annual steel production capacity of around 39mn mt, which it aims to increase to 70mn mt by 2025, while Shagang has a production capacity of around 45mn mt steel. 

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