Baosteel, China’s biggest steel producer, in considering taking over two rivals as part of the nation’s $586B stimulus plan to boost economic growth in response to the current global financial volatility.
Baosteel's take-over of Ningbo Iron and Steel Group and Baotou Iron and Steel Group will create a bigger steelmaker which will increase the bargaining power for iron ore.
According to a Bloomberg report, the aim is to create steelmakers with a capacity of 50 mtpa by 2011. China's government is also pushing Anben Steel Group, China’s fourth-biggest, to merge with Panzhihua Iron and Steel Group, while Taiyuan Iron and Steel Group, the biggest stainless steelmaker, will combine with rivals in Shanxi.
China produces about one third of the world's steel.
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