China plans to create world’s second-largest steelmaker

Beijing (Caixin) – China’s plan to create the world’s second-largest steelmaker faces an uphill battle because of its sheer complexity. Yet the government is determined to force steel capacity reductions through additional consolidation, according to several individuals with knowledge of the matter. The proposed merger of China’s second-largest and most profitable steelmaker, Shanghai-based Baosteel Group, with its money-losing smaller rival, Wuhan Iron & Steel Group (WISCO), will create an industry behemoth. But it may be just the beginning of a new wave of government-backed consolidation in the fragmented and inefficient steel industry, according to sources close to regulators. It also looks to be a first step in Beijing’s pledge to cut excess capacity, which trading partners blame for the global […]