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China plans to create a giant steel manufacturers

10 August 2016

China intends to create a real giant in the development of steel in the national steel sector. To achieve the goal succeed by combining leading manufacturers. It is assumed that Hebei Iron & Steel Shougang Group will join. The second leading metallurgical Corporation Shanghai Baosteel will merge with Wuhan Iron & Steel Group. Information about upcoming event has been provided by Bloomberg. The result of the upcoming merger would be the formation of two public companies. Southern and Northern China Steel China Steel is supposed to be dominant on the national steel market. This decision will give China the opportunity to compete with ArcelorMittal. Today this company is the largest iron and steel manufacturer. Small national metallurgical production in the future can be a part of the established associations. The national Committee for the control and management of state property does not comment on proposed changes.

The forthcoming restructuring of the metallurgical production will be the main part of the reform of China regarding state-owned enterprises. The Chinese authorities define the process as an important element of structural transformation of the national economy. The question arises, what will happen to the status of a country with market economy. A surplus of generation capacity to be able to provoke a refusal to provide it. Brussels and Washington have reported this to Beijing. Overproduction of metal for hire leads to another trade war. Warring parties can be China, the US and the EU. The consequences of military action will have a negative impact on the global economy.

By the way, Hebei Iron & Steel Group in may announced its intentions to reduce steel capacity. Reduction by the end of this year should reach 5.02 million tons. The company has planned and decreased production of cast iron. Production capacity will be reduced by 2.6 million tons/year. The company said that the reduction in capacity is from 2008. Production of steel decreased by 5.6 million tons. Pig iron output decreased by 6.8 million tons. However, the reduction was offset by the launch of new lines. In 2015, the company produced 47.75 million tons of steel products. She walked Baosteel Group almost 13 million tons. By 2020, the company plans to increase the number of products with increased added value to 70%.

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