Baosteel and Wuhan Steel Announce Restructuring Plan

Two of China's largest steel producers, Baosteel Group and Wuhan Iron Steel Group, are planning joint restructuring.


Baosteel Group is the second largest steel producer in China and Wuhan Iron Steel Group is the fourth largest in the country.


The companies did not specify what the restructuring would entail. However, Beijing had previously stated that the merger would be the main way to consolidate the iron and steel sector, with the aim of reducing excess capacity and increasing the share of production in China's ten largest factories.


China has pledged to tackle supply surplus in key industries, and in February said it would shut down 100 to 150 million tonnes of steel and 500 million tonnes of coal production over the next three to five years.

Chinese metallurgical companies Baoshan Co Ltd and Wuhan Co Ltd have specified in their exchange registration requests that their parent companies are planning restructuring. The details of the restructuring have not yet been finalized, and once they are settled, the deal must be approved by regulators, the company said.

The firms also said that they would each stop trading their shares as of June 27, and that they would release updates after five trading days.