Chinese steelmakers form new 60mt company

Northwest Union Iron & Steel Company was officially established in Xixian New Area in Shaanxi province on 28 January, with a registered capital of CNY 1 billion ($154.79 million). Six major steel enterprises in the region initiated the company, and now it contains nine steelmakers.

Kallanish notes that the six founders are Shaanxi Iron & Steel Group (Shaangang), Shanxi Jianlong, Shanxi Jinnan Steel Group, Shanxi Jingcheng Steel Holding Group (Jingang), Shanxi Gaoyi Iron & Steel, and Shanxi Jianbang Group.

The total iron and steel capacity of Northwest Union Steel currently reaches over 60 million tonnes/year. The company has both long and flat product capacity, but the majority is for long products.

The new company appears to be led by the local state-owned Shaangang, but also includes private investment through major players such as Jianlong Group. It is as yet uncertain how this impacts Jianlong Group’s goal of becoming a 50m t/y steelmaker.

Yang Haifeng, the chairman of Shaangang, was selected as the company’s chairman, and Zhang Tianfu, president of Jinnan Steel, will serve as the company’s general manager. Shanxi Jianlong deputy general manager Zhang Baodong will be vice chairman.

Coupled with Baowu’s accelerated merger of Shangang (see Kallanish passim), multiple signals indicate that China is speeding up the process of increasing steel industrial concentration.