Top 5 steelmaker made in China merger

Tag: sheet steel

Two Chinese steel have merged to form the world's fifth-largest producer, the latest in a series of government-orchestrated mergers aimed at creating globally competitive suppliers amid booming demand.

The new state-owned Hebei Iron and Steel Group Co. replaces Baosteel Group Co. as China's biggest steel company.

The move is seen as part of China’s drive to promote efficiency through consolidation and hopes bigger producers can strike better deals with foreign iron ore suppliers at a time of record prices.

The new company was formed through a merger of Tangshan Iron & Steel Group and Handan Iron & Steel Group.

"The new group is officially set up today," said Wang Yanjun, a Tangsteel spokesman. He said it would be based in the northern city of Shijiazhuang in Hebei province, which encircles Beijing.

Tangsteel's steel output last year was 22.75 million tons, while that of Hansteel was 9 million, according to the Chinese financial press. Their combined total would rank fifth worldwide after South Korea's Posco, which produced 32.8 million tons. Baosteel's 2007 output was 28.6 million tons.

Regulators have been shutting down smaller, dirtier steel producers in order to reduce the industry's environmental impact and Beijing has imposed curbs on steel exports to conserve energy.