Anshan Steel puts US plan on hold

PUBLISHED : Friday, 20 August, 2010, 12:00am
UPDATED : Friday, 20 August, 2010, 12:00am

Anshan Iron & Steel Group, one of the mainland's top producers of the alloy, has put its plan to invest in a US steel plant on hold in the face of political opposition. But Chen Ming, vice-chairman of its listed unit Angang Steel, says the delay will not affect the group's long-term international expansion strategy.

'We will not give up on international opportunities in raw material procurement, sales network build-up and plant construction,' Chen said yesterday.

Anshan agreed in May to pay US$175 million for a 14 per cent stake in a construction steel plant in Mississippi. But a bipartisan group of 50 US legislators last month called for an investigation, saying the deal would threaten American jobs and security.

Chen said Anshan had not received notice from the US government on any imminent investigation, but said strong political opposition saw it put the plan on hold.

The investments of several mainland firms in the US have run into political opposition. The most high-profile case was offshore oil producer CNOOC's withdrawal of a US$18.5 billion bid for Unocal five years ago amid stiff opposition from US politicians.

Telephone-equipment maker Huawei Technologies has twice failed to buy US assets since 2008 despite offering higher bids than rivals due to US national security concerns.

Mainland steel exports jumped 153 per cent year on year to 25.2 million tonnes in the first half as the industry sought to reduce domestic supply through exports. Amid political pressure, Beijing has cancelled a rebate on steel exports.

Angang has posted a first-half net profit of 2.76 billion yuan (HK$3.15 billion), compared to a loss of 1.55 billion yuan in the year-earlier period.