Angang Takes Over Benxi Forming Mega Steelmaker in China
Chinese steel makers Ansteel Group and Ben Gang formally began the process of merging their operations. Benxi Steel's listed subsidiary Bengang Plate announced that the government of north-eastern Chinese province Liaoning has approved a merger between Anshan Iron & Steel and Benxi Iron & Steel. Accordingly, the owner of Benxi Steel, Liaoning's State-owned Assets Supervision & Administration Commission, will transfer 51%equity in the steelmaker to Angang. The total crude steel production of Angang and Benxi was 55 million tonnes in 2020 and the combined capacity is 63 million tonnes, making the new conglomerate Ansteel the second largest steel producer in China after Baowu and the third largest in the world.
The merger of Bengang and Angang was first put forward more than 10 years ago but had seen little progress. Both Angang and Bengang are in northeastern China's Liaoning province, but different ownerships with tax re-allocation problems emerged as major hurdles that have held back the merger for several years.
China's government is a major supporter of steel industry consolidation as it wants to have a larger influence in negotiating raw material prices. China's Ministry of Industry and Information Technology has set the target to increase the ratio of the top five steelmakers' crude steel output to China's total output to 40% by 2025. After the merger of Angang and Bengang, the combined crude steel production of China's top five steelmakers will account for around 27% of the country's total crude steel production