Two Chinese steel giants have said that there is no exact information regarding China’s plan to consolidate the major producers, according to an Aug. 2 report by National Business Daily (NBD).
Wuhan Iron & Steel Group Corp. and Shanghai Baosteel Group Corp. said in an interview with NBD that they have not received any information about the merger, and that they therefore have no official statement to release.
Nevertheless, a report by Bloomberg, citing a source who asked to remain anonymous, said that Shanghai Baosteel Group Corp. and Wuhan Iron & Steel Group Corp. will merge to become Southern China Steel Group. Shares of the listed units of Hebei and Shougang rose in the wake of the news.
Northern China is more developed in steel production than southern China, and the majority of large steel enterprises are located in Hebei, Liaoning and Shandong provinces.
The report by NBD said that the proposed merger will help to reduce competition between the two companies in southern China. However, given that the merger involves the state-owned Assets Supervision & Administration Commission and the Wuhan Iron & Steel Group Corp., there is no specific information currently available, explained a spokesperson from the group. The spokesperson also told NBD that they will release the information on their official website as soon as they know more.
In the mean time, the two groups already released a joint statement on June 26, announcing plans for a strategic merger. Before that, the companies had denied rumors of a merger many times.