China’s Baowu Steel is in discussions to acquire Shandong Iron and Steel, to further cement its position as the world’s largest steelmaker and exceed 140mn mt in annual production.
The deal will add 115mn mt to Baowu’s 2020 output. Shandong is China’s seventh-largest steelmaker and produced 31.11mn mt of crude steel in 2020. In a filing with the stock exchange, the steelmaker noted that the new entity’s production would be 78pc more than ArcelorMittal’s 78.46mn mt output in 2020.
The Assets Supervision and Administration Commission (SASAC) branch in Shandong is formulating the agreement as part of a strategic reorganization.
Baowu acquired Taiyang Iron and Steel (Tisco), the country’s second-largest stainless-steel producer, in 2020. In 2019, the steelmaker purchased Shougang and Magang, which were then China’s sixth and ninth-largest steelmakers.
China’s Ansteel and Ben Gang entered a deal in April 2021 to become the world’s third-largest steelmaker. These deals are also viewed as part of China’s goal to consolidate 60-70pc of steel production in its top 10 companies by 2025.