Wuhan, Liouzhu to build a new plant
China's third largest steel producer Wuhan Steel had signed a memorandum of understanding to merge with Guangxi based Liuzhou Iron & Steel Group at the end of May. The company has recently announced the conditions of this agreement. According to the agreement, Wuhan will build a steel plant in South China with a cost of $6 billion. However, the project is subject to the approval of Baosteel Group and South Korean Pohang Steel (POSCO). The new plant will have a production capacity of 10 million tons. Both Wuhan and Liuzhou will invest in the project. Southern China is the weakest part of China in terms of steel production.