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SteelHome 2021 Summary: Mergers and Reorganizations of China' s Steel Industry

https://en.steelhome.com [SteelHome] 2021-12-28 11:45:54

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I China Baowu Group Takes Over and to Manage Kunming Steel

The government of China’s Yunnan Province inked a cooperation agreement with Chinese steel giant China Baowu Group, as announced by Yunnan Coal & Energy Co., Ltd. On February 1, 2021, which is a subsidiary of Yunnan-based steelmaker Kunming Steel. According to the agreement, 90 percent equity in Kunming Steel held by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of Yunnan Province will be transferred to Baowu Group for free, while it will continue to hold only the remaining 10 percent equity in Kunming Steel.

Meanwhile, SASAC of Yunnan Province has authorized Baowu Group to manage Kunming Steel for at most 12 months as parties will try their best to complete the equity transfer in six months.

At the moment, the capacity of Kunming Steel is 7 million tonnes annually.

II China’s Baowu to Acquire Shandong Iron & Steel

China Baowu Steel Group, the world’s largest steelmaker, is to add to its considerable industrial clout by taking over Shandong Iron & Steel Group, the tenth biggest steel mill in the world and China’s seventh biggest, giving it an output of nearly 150 million tons of crude steel a year.

“A planned restructuring may lead to changes in the controlling shareholder and actual controller of Shandong Iron & Steel,” the Jinan, northeastern Shandong province-based firm said. At present, the State-owned Assets Supervision and Administration Commission of Shandong Province holds a 70 percent stake.

III Ansteel Merged with Benxi Steel to Become World's Third-largest Steelmaker

According to the announcement released by Ansteel on August 20, the group has recently received a notice that the State-owned Assets Supervision and Administration Commission of the People's Government of Liaoning Province (hereinafter referred to as " The State-owned Assets Supervision and Administration Commission of Liaoning Province") and the People's Government of Liaoning Province jointly issued a notice agreeing to the Ansteel Group's reorganization of the Benxi Iron and Steel Group.

Ansteel will reorganize the 51% equity of Benxi Iron and Steel Group and Benxi Steel will become a holding subsidiary of Ansteel Group.

According to statistics released by the World Steel Association in June 2021, in 2020, the crude steel output of Ansteel Group and Benxi Steel Group was 38.19 million tons and 17.36 million tons, ranking the 7th and 19th in the world. Based on 2020 output, the combined output of Ansteel and Benxi Steel will reach 55.55 million tons, surpassing Hebei Steel Group's 43.76 million tons and ranking the third in the world.

IV China's Anyang Steel, Shagang Group Plan Mixed-ownership Reform

China's Anyang Iron and Steel Group has signed a letter of intent with the country's top private steelmaker Jiangsu Shagang Group to conduct a mixed-ownership reform, in a bid to further consolidate the ferrous sector in the world's top steel producer.

In a filing to the Shanghai Stock Exchange by Anyang Steel's unit, Anyang Iron & Steel 600569.SS said Shagang intends to become the controlling shareholder of its parent group after a "market-oriented" reform.

The move comes as China calls for further concentration of the steel sector, aiming to consolidate 60-70% production in the hands of its top 10 steelmakers by 2025 from less than 40% now.

The central China-based Anyang Steel is currently backed by the state assets regulator of Henan province. It has an annual steel production capacity of around 10 million tonnes.

V Liuzhou Steel Became the Controlling Shareholder of Guangxi Iron and Steel

On December 24, Liuzhou Iron and Steel Co., Ltd released the "Liuzhou Iron and Steel Co., Ltd. major assets reorganization implementation progress notice". It is learned from the announcement that Liuzhou Iron and Steel Co., Ltd. (hereinafter referred to as the "Company") will increase the capital of Guangxi Iron and Steel Group Co., Ltd with monetary capital. After the completion of the capital increase, the company's capital contribution accounts for 45.83% of the registered capital of Guangxi Iron and Steel. Meanwhile, the company is entrusted to exercise the voting rights corresponding to 45.58% of guangxi Iron and Steel held by Guangxi Liuzhou Iron and Steel Group Co., Ltd., with a total voting right ratio of 91.41%. It becomes the controlling shareholder of Guangxi Iron and Steel and includes Guangxi Iron and Steel into the scope of consolidated financial statements.

VI Liuzhou Iron and Steel Group Restructures Guangxi Ferroalloy Company

On April 7, Liuzhou Iron and Steel Group and Laibin Municipal Government held a signing ceremony for the free transfer of Guangxi Ferroalloy Co., Ltd’ s equity, marking that Guangxi Ferroalloy Company officially jointed Liuzhou Iron and Steel Group with state-owned enterprises after the reorganization of 11th Metallurgical Group. It is a new starting point for the transformation and development of Guangxi Ferroalloy Company.

VII Jinan Steel Merges with Hebei Xinghua Steel

Hebei Xinghua Iron and Steel Co., Ltd underwent a shareholding change on June 23, that Chen Maochun, the former 51 percent shareholder, withdrew from the company and Wang Shuhua's shareholding increased from 49 percent to 100 percent and replaced Chen as the legal representative of Hebei Xinghua Iron and Steel. Hebei steel enterprise Jinan Iron and Steel Group completed the merger of Hebei private steel enterprise Xinghua Iron and Steel.

VIII Xingtai Iron and Steel Completes Restructuring Work

On August 5, Puyang Iron and Steel and Xingtai Iron and Steel jointly issued a letter to customers. On July 10, 2021, Hebei Puyang Iron and Steel Co., Ltd. completed the equity reorganization of Xingtai Iron and Steel. After the reorganization, Xingtai Iron and Steel will adhere to the development path of special steel, and not change its business strategy of vigorously developing automotive steel and high-end steel grades. Through the association between strong enterprises, in virtue of Puyang Iron and Steel's strong economic strength, excellent management experience and strong industry resources, Xingtai Iron and Steel will be more perfect and faster on the product quality, delivery speed, after-sales service and other aspects.

IX Puyang Steel Acquires Another Mill in Hebei, Capacity Now above 10 Million Tonnes

Hebei Province-based Chinese steelmaker Puyang Iron and Steel Group (Puyang Steel) has acquired another Hebei steelmaker, Hebei Xinwuan Iron and Steel Group Hong Rong Iron and Steel Co., Ltd., obtaining 70 percent of its equity.

In 2020, Puyang Steel’s annual crude steel output amounted to 6.3 million tonnes, while Hong Rong Steel’s annual crude steel output exceeded 2.0 million tonnes. Puyang Steel has also a subsidiary, Xingtai Iron and Steel, with more than 2.0 million tonnes of crude steel capacity.

Accordingly, Puyang Steel’s overall annual crude steel capacity will exceed 10 million tonnes.

X Yixin Steel and Jiangyang Steel Plan to Merge

Luzhou Provincial Economic and Information Commission has announced that, in order to deepen supply-side reform and promote structural adjustment and transformation of the local steel industry, Sichuan Province-based Luzhou Yixin Iron and Steel Co. and Sichuan-based Jiangyang Iron and Steel Co. plan to merge, forming a new company called Xinyang Iron and Steel Company. Accordingly, the electric furnaces of Yixin Iron and Steel Co. and Jiangyang Iron and Steel Co., with annual capacities of 1.92 million tonnes of crude steel and 600,000 tonnes of crude steel respectively, will be torn down and replaced by two 100-ton electric furnaces, giving the new steel company an annual crude steel capacity of 2.0 million tonnes.

XI Xining Special Steel: The Controlling Shareholder Plans to Introduce Strategic Investors and Other Major Issues

Xi'ning special steel announced that the controlling shareholder Xi'an iron and Steel Group plans to introduce strategic investors, implement strategic restructuring, and simultaneously implement the overall environmental relocation work. The introduction of strategic investors planned by Xi'an iron and steel group may lead to the change of the actual controller of the company. As the matter is still in the planning stage, the relevant scheme has not yet been determined, and the subsequent decision-making and approval procedures need to be performed by the relevant competent departments.

XII Delong’s Tangshan Steelwork Mergers with Jiujiang Wire

Delong Group, a privately-owned Chinese steel producer with steel plants in Tangshan of Hebei and Tianjin, both in North China, will merge its steelworks in Tangshan with another local privately-owned wire rod producer - Qian’an Jiujiang Wire Rod Co (Jiujiang Wire) to help with “further integration of Tangshan steel industry”, according to the company releases on August 3-4.


(To contact the reporter on this story: leo.ji@steelhome.cn or 86-555-2238932 18616060095)
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