The Ministry of Industry and Information is studying and formulating the Regulations on Merger and Reorganization of Iron and Steel Enterprises
Yang Xueshan, the deputy director of China's Ministry of Industry and Information Technology, announced on the 15th that the ministry is working on drafting the "Regulations on Mergers and Reorganization of Iron and Steel Enterprises" to guide and regulate large-scale mergers and acquisitions within the steel industry.
Speaking at a forum in Anshan, Liaoning Province, which focused on the integration of informatization and industrialization in the national steel sector, Yang emphasized that for many years, slow progress in the merger and reorganization of Chinese steel companies has been hindered by outdated systems, mechanisms, and policies. With the global financial crisis and domestic overcapacity in steel production, optimizing the industry’s structure through consolidation has become essential for revitalizing the sector.
To support this process, the Ministry is developing the new regulations in alignment with the "Regulations for the Adjustment and Revitalization of the Iron and Steel Industry," as well as relevant national laws. These measures aim to streamline major mergers, address challenges during the process, and accelerate industry consolidation. The goal is to foster the growth of large-scale steel enterprises, enhance resource allocation efficiency, and strengthen competitiveness both domestically and globally.
Currently, China has over 500 crude steel producers, with an average output of less than 1 million tons per company. The top five firms account for just 28.5% of the country's total steel output, far below the 60% or even 70% seen in leading steel markets like the U.S., EU, and Japan. In times of market downturns, declining demand, and weak consumer confidence, companies often engage in price wars, squeezing profit margins and weakening their ability to withstand economic shocks.
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