Two major steelmakers in China, steelmakers Ansteel and Ben Gang Group Corporation, signed a merger and restructuring agreement Friday to create the world's third largest steelmaker.
The Chinese government is encouraging mergers and acquisitions in the country's steel market in an effort to both eliminate fears of potential oversaturation and reduce the carbon footprint of a highly polluting industry by consolidating blast furnaces and other facilities. p>
Ansteel and Ben Gang are the backbone of the economy in their home province of Liaoning, and it is unclear whether the merger will result in any capacity cuts.
According to the World Steel Association, Ansteel produced 39.2 million tonnes of steel in 2019 and Ben Gang 16.18 million tonnes. Earlier it was reported that Ansteel plans to increase its annual production capacity to 70 million tons by 2025.
Ansteel and Ben Gang first agreed to merge back in 2005, but the partnership did not progress and was eventually disbanded.
