As the supply-side structural reform of the steel industry continues to advance, the competitiveness and anti-risk ability of China’s steel industry have significantly improved. Driven by national policies, the steel sector has set off a wave of mergers and acquisitions. Among them, Baowu Iron and Steel is a typical representative, and even presents a phenomenon that China reorganizes to look at Baowu. Since its establishment in September 2016, Baowu Iron & Steel has never stopped its pace of expansion, and has successively acquired steel companies such as Chongqing Iron and Steel and Taiyuan Iron and Steel.
At the end of 2016, the former Baosteel Group and the former Wuhan Iron and Steel Group jointly reorganized to form the Baowu Group. At that time, the group’s total production capacity was approximately 58.5 million tons;
In September 2019, Baowu Group completed the acquisition of Maanshan Iron & Steel (Group) Holding Co., Ltd., a local state-owned enterprise in Anhui, and its total production capacity increased to 90 million tons;
In August 2020, Baowu Group merged Taiyuan Iron and Steel (Group) Co., Ltd. with a production capacity of 12.94 million tons;
In September 2020, Baowu Group acquired Chongqing Iron and Steel Co., Ltd., and the group’s total production capacity increased to 111 million tons;
In November 2020, Baowu Group acquired Xinxing Casting Pipe and Xinjiang Yili Steel, increasing its production capacity to 115 million tons.
On February 1, 2021, the Yunnan Provincial People’s Government and China Baowu signed a cooperation agreement. The Yunnan Provincial State-owned Assets Supervision and Administration Commission plans to transfer 90% of its shares in Kunming Iron and Steel Holdings Co., Ltd. (hereinafter referred to as Kunming Iron and Steel Holdings) to China Baowu for free. Wu. It is reported that Kunshan Iron and Steel Co., Ltd. has a steel production capacity of 10 million tons.
On July 14, 2021, Shandong Iron and Steel Co., Ltd. (hereinafter referred to as Shandong Iron and Steel Co., Ltd.) issued a reminder announcement concerning the strategic restructuring of Shandong Iron and Steel Group Co., Ltd. According to the announcement, Shandong Iron and Steel Group Co., Ltd. (hereinafter referred to as Shandong Iron and Steel Group) notified that the State-owned Assets Supervision and Administration Commission of the People’s Government of Shandong Province is working with China Baowu Iron and Steel Group Co., Ltd. (hereinafter referred to as China Baowu) to plan for the Group strategic restructuring matters.
It is reported that Shanxi Iron and Steel Group was established in 2008 through the merger and reorganization of Jinan Iron and Steel and Laiwu Iron and Steel Co., Ltd. In 2020, Shandong Iron & Steel Group’s revenue will exceed 220 billion yuan, and its crude steel production capacity will exceed 31 million tons.
After China Baowu completes the strategic reorganization of Shanxi Iron and Steel, its steel plants will be distributed in five major regions and 12 provinces and cities, including Shanghai (Baosteel Compound), Anhui (Maanshan Iron and Steel), Shanxi (Taigang), Shandong (Shandong Group) ), Yunnan (Kunshan Iron and Steel), Hubei (Wugang, Egang), Guangdong (Shaogang, Zhanjiang Iron and Steel), Xinjiang (Bayi Iron and Steel, Xinjiang Xinxing Casting Pipe, Xinjiang Yili Iron and Steel), Chongqing (Chongqing Iron and Steel), Zhejiang (Ningbo Baoxin), Jiangsu (Meishan Iron and Steel), Fujian (Baosteel Desheng), etc. Baowu’s territory is further expanded, and its market coverage and comprehensive competitiveness will be effectively improved, and its production capacity will be close to 160 million tons.

In the context of the wave of steel mergers and acquisitions, the state is also introducing relevant policies to further promote the agglomeration of the steel industry. At the beginning of 2021, the Ministry of Industry and Information Technology issued the “Guiding Opinions on Promoting the High-quality Development of the Iron and Steel Industry”, which clearly pointed out that by 2025, the industrial layout will be more reasonable and the development level of industrial agglomeration will be significantly improved. Build several world super-large steel enterprise groups and professional first-class enterprises, and strive to achieve 40% industrial concentration of the top 5 steel enterprises and 60% of the top 10 steel enterprises. Corresponding to the target, the document puts forward in the main task, it is necessary to accelerate the merger and reorganization. Further deepen the reform of mixed ownership, promote the merger and reorganization of leading enterprises in the industry, and establish and build a number of world-class super-large steel enterprise groups.
Peng Huagang, Secretary-General and Spokesperson of the State-owned Assets Supervision and Administration Commission of the State Council, revealed at a press conference on the economic operation of central enterprises in the first half of 2021 on July 16. Adjust the opinions and deployment, adhere to the principle of marketization, comply with laws and regulations, and actively and steadily guide the central enterprises to do a good job in restructuring.” Peng Huagang said that in terms of strategic restructuring, focus on the implementation of supply-side structural reforms, innovation-driven development, and construction of manufacturing In accordance with the needs of industrial development and the principle of “one maturity and one promotion”, national strategies such as strengthening the country will steadily promote the reorganization and integration of central enterprises in the steel, transmission and distribution equipment manufacturing industries, and actively cultivate timely formation of new enterprises in related fields. Central Enterprise Group.
With the implementation of each policy, all enterprises actively responded to the call, combined with their own development, expanded the industrial area, and opened the road of integration and acquisition. Since only August, Shagang has successfully acquired Anyang Huacheng Bosheng and Huixin Special Steel, and merged 5 companies with mixed reforms. Xintian Steel Decai Technology Group was unveiled, Jiujiang Wire and Tangshan Delong reached a strategic cooperation, and Puyang Iron and Steel Holdings Xing The merger and reorganization of steel and other industries, as well as the process of joint integration, are accelerated, with a view to making the enterprise bigger and stronger by concentrating resources, complementing each other’s advantages, and combining strong forces.
In particular, on August 20, the Anshan Iron and Steel Reorganization Conference was held in Anshan City, Liaoning Province. The State-owned Assets Supervision and Administration Commission of Liaoning Province transferred its 51% stake in Benxi Iron and Steel to Anshan Iron and Steel for free, and Benxi Iron and Steel became Anshan Iron and Steel’s controlling subsidiary. The large steel companies Angang Group and Benxi Iron and Steel Group, each with a century-old history, were formally reorganized, ranking second in China and third in the world with an annual output of 63 million tons of crude steel, second only to China Baowu and Arcelormi Tal, became another steel “big Mac”.
Baosteel Co., Ltd. announced on August 21 that the company and Baotou Steel Co., Ltd., based on consensus, intend to cooperate on steel pipes, work together to optimize resource allocation, achieve business focus, and improve professional operation. After friendly negotiation, the two parties signed the “Steel Pipe Industry Cooperation Framework Agreement”. The scope of cooperation is the comprehensive cooperation between Baosteel and Baotou Steel’s steel pipe sections.
Is the cooperation between Baosteel and Baotou Steel in the field of steel pipes a “prelude” to further cooperation and integration, stimulating deeper “chemical reactions”? We will also wait and see. Baosteel and Baotou Steel have also tried to integrate, but they failed in the end. However, driven by national policies and accelerated industrial restructuring, the two parties are also likely to undergo restructuring and integration. According to the “World Steel Statistics 2021″ report released by the World Steel Association, Baotou’s steel output in 2020 will reach 15.61 million tons! If Baowu can restructure Baotou Steel, the production capacity will exceed 170 million tons by then!
China Baowu will take over Shandong Iron and Steel after successively reorganizing steel companies such as Chongqing Iron and Steel, Maanshan Iron and Steel, and Taiyuan Iron and Steel. According to the analysis article of the China Baowu Public Account, during the “14th Five-Year Plan” period, China Baowu has firmly committed to the goal of “exceeding hundreds of millions of dollars”, striving to double strength and double performance; double corrosion resistance and double life; steel prices Halve, double consumption; production capacity market share, Baowu doubled!
With such ambitions and favorable national policies, China Baowu will also continue to optimize its layout in other regions. If future internationalization is taken into account, China Baowu’s production capacity is likely to exceed 200 million tons. . According to the national crude steel output of 1.065 billion tons in 2020, China’s Baowu will account for nearly 20% of the country. This will also further accelerate the merger and reorganization process of the overall steel industry and achieve the goals set by various national policies!
Under the guidance of the above national policies and the advancement of the development trend of the steel industry, it is expected that the years before 2025 will be an important period for large-scale mergers and reorganizations of the Chinese steel industry. After this round of mergers and reorganizations, the industry concentration will be increased. Significant improvement, product structure and industrial layout will be greatly optimized, the competitive landscape will be greatly improved, and the industry will enter a virtuous development cycle. Iron and steel enterprises must also deploy horizontal and vertical joint and reorganization from a global perspective in an environment where my country’s economic development is advancing the domestic cycle and the domestic and international dual cycles, to solve the security bottlenecks in resources, energy, supply chains, and industrial chains, and to lead the world in China’s steel industry for a century.