China's largest steelmaker Baosteel has bought 1.44 percent of Jiangxi Province-based Xinyu Iron & Steel Company's listed arm Xinhua Metal Products for a value of RMB 200 million ($27 million) on the stock exchange.
Xinyu Steel is an important ferroalloy production base in China. The steel production of the mill reached 5.09 million mt in 2006.
It is rumored that Baosteel's share purchase is an initial step towards an eventual takeover of Xinyu.
So far, Baosteel has completed the takeover of Bayi Steel and is very near to finalizing the takeover of Baotou Steel, both of which are located in China's Xinjiang Uyghur Autonomous Region.