- CNTV English - CCTV News

Homepage > News > Biz >

Steel moves heat up in Shanxi

07-06-2010 11:03 BJT

By Zhang Qi

BEIJING, July 6 (Xinhaunet) -- China's largest stainless steelmaker, Taiyuan Iron & Steel Group, hopes to finalize details of a planned acquisition of Zhongyu Iron & Steel Group by early September, said a source familiar with the deal.

The consolidation move would make it the first acquisition of Shanxi province's steel restructuring plan.

"Taiyuan Steel and Zhongyu discussed merger details two weeks ago, led by Shanxi Province's Economic and Information Committee," said the source.

"Taiyuan Steel wants to conclude the deal in two months to allow time (to begin) operations before the peak season starts in October."

The deal will be the first acquisition by Taiyuan Steel as the State-owned mill has taken the lead in Shanxi province's 45 million tons of capacity consolidation, starting this summer.

Beijing-based Shougang Group will lead the province's capacity consolidation for the remaining 15 million tons.

Shougang paid 500 million yuan ($79 million) for a 90 percent stake in Shanxi's Changzhi Iron & Steel last year and plans to invest 19 billion yuan over the next three years to boost its annual steel production capacity to six million tons.

"We are talking with Zhongyu about the merger, but (the details) have yet to be settled," said Guo Juncai, vice-director of the Development and Planning Department of Taiyuan Steel.

Taiyuan Steel had selected seven to eight steelmakers, with capacity of more than 1 million tons, for the first stage of consolidation. The companies include Meijin Steel, Zhongyu Iron and Steel, Zhongyang Iron and Steel, Antai Group and Luliang Iron and Steel Project, Shanxi Youth Newspaper said.

The new plan designates that Taiyuan Steel will regroup steel bases in Taiyuan, Luliang, Yuncheng and Linfen, where Zhongyu is based.

"Acquiring Zhongyu could enhance Taiyuan Steel's marketing in the Linfen area," said Zhang Lin, an analyst from Lange Steel Research Center.

"Taiyuan Steel produces high-value-added stainless steel while Zhongyu produces low-value-added products like construction steel. Zhongyu's products could also fill in the gaps for Taiyuan Steel."

Shanxi province has more than 200 steel mills. There are only five steel mills with a capacity over 2 million tons, and 13 steelmakers with 1 million ton's of capacity.

The central government is encouraging big mills to merge with rivals to create more cohesive steel groups.

The nation's top 10 steelmakers are expected to account for more than 60 percent of the country's total steel capacity by 2015.

The government will withhold approval for any new projects aiming to expand capacity by 2011, forcing steel mills to consolidate.

Editor:Xiong Qu |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program