Beijing betting bigger is better as it pushes consolidation of state-owned steel plants
- Beijing wants top 10 steel producers to have 60 per cent of overall capacity by 2020
- Beijing encouraging mergers and acquisitions of steel companies
In China’s bid to rejuvenate its steel sector, it is betting on size.
In 2018, the mainland’s 10 largest steel companies reported a combined output of 340 million tonnes, accounting for 36.5 per cent of the national total.
“In the coming years, government will encourage mergers and acquisitions in the industry to accelerate the pace of consolidation,” said Wei Yingsong, an analyst with industry consultancy Mysteel. “Economic policymakers have the faith in business scale as they believe big-size steel giants can effectively help enhance the country’s manufacturing might in the industry.”
Steel once was one of the country’s backbone industries amid China’s breakneck economic growth driven by massive investment in infrastructure and real estate projects between early 1990s and 2015.
