Recently, the reporter learned that due to the dual influence of the market and policies, many steel companies in China are planning cross-regional, inter-provincial and cross-ownership mergers and acquisitions to seek a larger, more stable and farther development space.
Wang Lianzhong, executive deputy secretary-general of the All-China Metallurgical Chamber of Commerce, said that since 2017, the restructuring of domestic steel enterprises by means of marketization has become one of the important means.
According to reports, the current merger and reorganization of steel enterprises is in-depth development, and a large number of enterprises are brewing negotiations and restructuring. Achieving the goal of achieving a 60% concentration in the steel industry in 2025 will result in a larger restructuring. Taking Hebei as an example, it is planned to build three large steel groups with private steel-based leading capacity in the regional market, supported by Qian’an, Fengnan and Wu’an local steel groups.
The layout of China’s steel industry is characterized by “high weight in the north and light in the hinterland”. In some regions, steel production is high and production capacity is too concentrated. The reporter learned that with the deepening of capacity, the capacity trading has reached the point where there is no market and no indicators to buy. Steel companies are accelerating restructuring under the constraints of environmental protection, market resource element allocation and management elements.
Wang Lianzhong said that encouraging qualified enterprises to seize the opportunity to carry out cross-regional and cross-ownership mergers and acquisitions and increase resource integration is conducive to balancing the environmental capacity of different regions and reducing or avoiding homogenization competition within the industry. At present, China’s steel production capacity and capacity utilization rate have basically reached a reasonable range, and should be smoothed through financing channels to help steel companies merge and restructure.
The industry believes that in the next few years, the steel industry will likely have four major trends of major relocation, major restructuring, major adjustments, and major upgrades, namely: capacity transfer and relocation of cities and counties across provinces and counties; Larger, it may form a number of steel groups with larger production scales, and the concentration will be further improved; the development direction and production capacity, product structure and varieties of enterprises will undergo major changes; the upgrading of large-scale production equipment such as large blast furnaces and large converters will begin one after another.
Post time: Mar-16-2019