AFP, Shanghai :
China is expected to announce plans to merge the country’s top steelmakers this week, according to media reports, creating the world’s second-largest manufacturer of the commodity, as markets struggle with a glut caused by Chinese overcapacity.
State-owned Baosteel Group, China’s second-largest steelmaker, will absorb Wuhan Iron and Steel Group to create the new entity, the China Business News reported late Monday.
The two firms rank fifth and 11th respectively by production capacity in the world. The new firm will be called China Baowu Iron and Steel Group, the report said, adding the state asset watchdog has already approved the plan and submitted it to the State Council-China’s cabinet for final approval.
China Securities Journal, which is managed by the official news agency Xinhua, said the plans could be announced this week.
The combined production capacity of the two firms reached 60.7 million tonnes last year, data from the World Steel Association showed, which would make the new entity the world’s second biggest producer by capacity, behind ArcelorMittal.
