Chinese state-owned steelmakers Bengang Steel and Angang Steel located in northeast China’s Liaoning province are preparing to move ahead with their long-awaited merger, which has been added to the provincial government’s five-year plan.
The controlling shareholders of Angang are in the planning stages to acquire Bengang, Bengang subsidiary Bengang Steel Plates said in a filing. The merger is still awaiting government approval and the agreement of final details by the companies, it said.
The merger of Bengang, also known as Benxi Steel, and Angang was first put forward more than 10 years ago but has seen little progress. Bengang produced 17.36mn t of crude steel in 2020, up by 7.3pc from 16.18mn t in 2019. Angang produced 26.48mn t of crude steel in 2020, down by 2.5pc from 27.16mn t in 2019.
Angang has targeted to increase its steel capacity from 39mn t/yr to 70mn t/yr during 2021-2025, the period of China’s 14th five-year economic plan, and a merger will be the best way to achieve that goal, market participants said.
Liaoning province has also added the merger to its 14th five-year plan and vision for 2035.
The merger will create one of the world’s largest steelmakers. China’s state-controlled Baowu and Luxembourg-based ArcelorMittal are the world’s largest steelmakers with 115mn t and 92.5mn t of crude steel production, respectively, in 2020.
