International Steel Mills
Baosteel and Wuhan Contemplating Merger
Written by Sandy Williams
June 28, 2016
Baosteel and Wuhan Iron and Steel Group (Wisco) are contemplating a merger that would unseat Hebei Iron and Steel Group as China’s largest domestic producer and rival European steelmaker ArcelorMittal.
A merger of China’s second largest steelmaker Baosteel with fifth ranked Wisco would create a combined output of approximately 70 million tonnes. The merger would place the new company as largest in China, ahead of Hebei Iron and Steel’s 47.5 million tonne capacity. On a global basis the new company would take second place behind ArcelorMittal which produces 97.14 million tonnes annually.
In recent years both companies have absorbed smaller mills, removing outdated capacity and improving efficiency. A combination of the two could save even more by eliminating redundant facilities and improving resource allocation.
Baosteel and Wisco are directly administered by the Central Government and Wisco is chaired by Ma Guoquiang, a Baosteel veteran. A merger would fit well within the government’s plans to consolidate the domestic steel industry and reduce overcapacity.
China’s steel industry has been hurt by a domestic economic slowdown and by a deluge of trade cases from around the world against Chinese steel exports. Cited as responsible for the majority of steel overcapacity, Beijing has promised to reduce capacity by 45 million tonnes in 2016 and by 100 to 150 million tonnes over the next five years.
Baosteel and Wisco filed notice of “strategic restructuring” with the Shanghai Stock Exchange on June 26 and requested trading of their stocks be suspended as of June 27. The statements said more information would be released after five trading days.
Sandy Williams
Read more from Sandy WilliamsLatest in International Steel Mills
CRU: Bids made for Ilva assets
The Italian government has received 10 offers for the former Ilva integrated steel works at Taranto, but only two bidders are interested in purchasing all of the company’s assets.
Global steel production declined through August
August marked the second-lowest monthly production rate this year, down 13% from the two-year high of 166.6 million mt in March.
Algoma Steel assesses viability of US sales in wake of 50% S232 tariffs
Canadian flat-rolled steelmaker Algoma Steel is reconsidering its presence in the US market after the doubling of US Section 232 tariffs on imported steel to 50%, a company spokeswoman said.
Nippon plans to double steel output at USS operations: Report
Now that it has acquired U.S. Steel, Nippon Steel is planning a significant expansion of its US operations, including the construction of a new mill and more than doubling its steel output.
Global steel mill output steady through May
Global raw steel production rose 2% from April to May, slightly above average production levels seen in recent months, according to data recently released by the World Steel Association (worldsteel).