Two of China’s steel giants plan merger in face of global glut

BEJING: Two of China’s biggest steelmakers are planning to merge, as the industry faces a global glut that has hammered producers worldwide.

Baosteel Group, China’s second-largest steelmaker, is “planning a strategic restructuring with Wuhan Iron and Steel Group”, another giant, both companies’ listed units said in separate statements to the Shanghai stock exchange late Sunday.

Baosteel produced 36.1 million tonnes of steel last year, more than Brazil and three times more than Britain, according to the World Steel Association, whose ranking shows that if it was a country it would be eighth in the world.

But Chinese steel demand has slumped as its economic growth has slowed and the global steel industry is assailed by huge overcapacity, which has plunged manufacturers into losses from Asia to Europe to the US, and seen political rows and accusations of dumping.

Source : AFP



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