Hebei Iron & Steel Group has overtaken Baoshan Iron and Steel as the industry leader after a string of domestic mergers, the Ministry of Industry and Information Technology said.
The ministry also said on its website that crude steel production in May rose 7.02 per cent from April and 0.57 per cent from a year ago to 46.46 million tonnes.
Hebei province, the largest steel producer in the country, had an output of 11.6 million tonnes in May, up 10.8 per cent from the same period last year, it said.
Hebei Steel, which was formed in June last year under a government-directed merger between Tangshan Iron & Steel Group and Handan Iron & Steel Group, has been injecting steel assets into listed company Tangshan Iron & Steel.
Analysts said Tangshan Iron & Steel's annual output has reached 27 million tonnes, which is larger than Baosteel's 24.93 million tonnes, after the injections.
Premier Wen Jiabao reiterated last month when he visited the province that steel industry leaders should foster domestic mergers and acquisitions as a way to curb oversupply.