China to Foster Several Large Steelmakers

The number of steelmakers in China will eventually reduce from current some 800 to approximately 200 through means of reorganizations and the elimination of outmoded capacity, said an official from the Ministry of Industry and Information Technology. The ministry has urged local authorities to work out programs on merger and acquisition practices by steelmakers within their jurisdiction before sending them to the central government by the end of this year.

Since 2007 there has been an obvious trend in consolidating the domestic steel industry through the following principal ways: the acquisition of regionally state-owned steelmakers by the central governmental-run ones; mergers among players from the same region both usually involved large sums of money; and private sectors' participation in state-owned or non-governmental-run steel producers, a phenomenon with relatively fewer capital involved yet exhibiting a strong sign of vigor.

According to China's ultimate blueprint, there will be three to five world-competitive steelmakers and six to seven super large producers at home by the end of 2015 when the top ten groups are supposed to make 60 percent of the country's total output, up from 44 percent in 2009.