STEEL NEWS

Shandong Iron and Steel Group joins China Baowu Steel

China's Shandong Iron and Steel Co Ltd said 

Wednesday it could change ownership as a result of a planned restructuring of its parent company with the world's leading steelmaker China Baowu Steel Group, Reuters reported.

The company said in a filing on the Shanghai Stock Exchange that the state-owned asset regulator of Shandong province in eastern China is working with Baowu on a "strategic restructuring" of its parent company, Shandong Iron and Steel Group.

"This issue could lead to a change in the holder of the controlling stake in the company and the actual controller," - said in the message, adding that uncertainty remains.

Baowu did not comment on this ad.

The Shandong Provincial State Assets Supervision and Management Commission said in a statement late Wednesday that the restructuring will help develop the local steel sector and enhance the competitiveness of Shandong Steel Group.

“(This) will help our province meet its peak carbon emissions target in advance,” the regulator said, adding that the government “will fully support and actively promote” the restructuring.

Chinese media outlets 21st Century Business Herald reported in January that Shandong Iron and Steel Group, the seventh largest steel producer in China with production of 31.11 million tonnes in 2020, will be merged with Baowu.

The acquisition of the Shandong manufacturer will boost Baowu's annual steel production from 115 million tonnes last year to 150 million tonnes, up from the 139 million tonnes produced by the European Union in 2020, according to the World Steel Association.

Following the deal, Baowu's share of China's total steel production will rise to about 14%.