Some of the targets in the Chinese government's plans to create three steel companies with over 30 million mt of annual production and ten steel companies with over 10 million mt by 2010 may be realized in 2008.
The China Iron & Steel Association (CISA) is aiming to create such giant companies through mergers and acquisitions among the various steel companies in China. The recent measures taken by the government, which have pressurized the steel market, are also expected to contribute to the merger process.
Currently, Baosteel and Angang have over 20 million mt each in annual production capacities and they seem to be the most likely candidates to exceed the 30 million mt barrier. Meanwhile, Shandong Provincial Government also intends to reorganize Jinan Steel, Laiwu Steel and Rizhao Steel, to thus form the third 30 million mt mill.
At present, there are 15 mills in China with capacities of over five million mt. However, their share in the total steel production of the country is only 45 percent. In the other major steel-producing countries of the world, the first 15 steel companies generally account for 90 percent of steel production.