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

China’s Baogang group has invested in a new steel plant with capital worth of CNY1bn in a joint venture with Xinjiang region steel and Huabao investment company, according to the Chinese media.  Baogang steel through its subsidiary Bayi Iron & Steel has established this joint venture.


The registered capital of this new steel company would be CNY1bn ($141mn). In the collaboration, Xinjiang steel has invested CNY500mn ($70.6mn) with 50pc stake while Baogang group and Huabao investment would each hold 25pc of the shares with an investment of CNY250mn ($35.4mn).


In 2019, Boagang steel (Baowu) steel produced 95.22mn mt of steel, recorded CNY55.8bn ($7,877mn) operating profit, with CNY2.53bn income ($357mn). Bayi steel in its 2020 business plan cited that it would integrate steel production capacity in the Xinjiang region. Over 90pc capacity in the region will be controlled by leading three steelmakers -Baosteel Bayi Steel, Xinxing Pipes and Shougang Yili.


The Chinese government has instructed Xinjiang Steel to scale down around 6.85mn mt annual capacity. Xinjiang steel produced 12.37mn mt of crude steel in 2019, up by 7.1pc from the prior year. In April 2007, Boagang group has acquired Xinjiang steelmaking. As a part of this venture, Baogang would also look into building a low carbon steel and research centre. 

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