Wednesday, September 05, 2012

The next big merger in iron and steel...

We came across a discussion recently [see] of the development plans of China’s Shagang Iron and Steel. The Shagang Group produced close to 32 million tonnes of crude steel in 2011, making it the 7th largest steelmaker in the world. The discussion talked about the growth plans of Shagang, and mentioned the possibility of cooperation or merger between the Shagang Group and Shanghai Baosteel. Baosteel produced ~43 million tonnes of steel in 2011, making it the world’s second largest steelmaker.


Merger of Shagang and Baosteel would create a Chinese steel giant with steel production of over 75 million tonnes. This volume of steel output would start to approach that of ArcelorMittal  - the world’s largest steelmaker – who produced 97 million tonnes of steel in 2011.


So, could a Baosteel–Shagang merger be the next step in the consolidation of the global steel industry?

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