China’s two major steelmakers, Ansteel and Ben Gang Group Corporation, inked a deal to kick off their merger and restructuring that will create the world’s third-largest steelmaker.
After the merger, they will have an annual production capacity of 63 million tonnes of crude steel, ranking third worldwide after China Baowu Steel Group Corporation Limited and Luxembourg-headquartered ArcelorMittal.
Founded in 1916 and 1905 respectively, Ansteel and Ben Gang are both located in northeast China’s Liaoning Province, and their major production bases are 60 km apart.
The merger will set of future growth prospects for the company, according to its reports by 2025, the target is an annual output of about 70 million tonnes of crude steel, 50 million tonnes of iron concentrate, and around USD46.3 billion of operating income.
China has been the world’s leading steel producer for years. Over the past 20 years, China’s annual crude steel production has risen to 1.05 billion tonnes. However, the steel industry is currently facing the bottleneck of excess capacity, low-level supply, and high dependence on external steel resources.
According to a plan released by the Ministry of Industry and Information Technology, by 2025, China will build a number of super-large steel conglomerates, and its top 10 steel enterprises will contribute to 60 percent of the country’s steel output.