China’s biggest steelmaker plans to boost capacity while Beijing seeks cut
Baowu Steel aims to consolidate position by increasing output as government plans to reduce output take toll on smaller private firms
China’s biggest steelmaker, which was created a year ago by merging two large struggling state-owned steel plants, is trying to boost its total annual output capacity from the current 60 million tonnes to 100 million tonnes, according to its general manager.
The ambitious plan by China Baowu Steel Group Corp, which is now ranked as the world’s second biggest steel producer next to ArcelorMittal, was announced as Beijing started to shut down many private steelmakers for environmental reasons and continued with plans to phase out obsolete facilities.
“In the next decade or two, China’s steel capacity may fall to 400-500 million tones. Baowu plans to raise its market share to 20 to 25 per cent,” the group’s general manager Chen Derong told a steel forum in Shanghai on Wednesday.
“It is an inevitable trend that China’s crude steel output will fall, but China Baowu will increase capacity. Our capacity target is set at 100 million tonnes,” Chen was quoted by China News Service, a state agency, as saying.
Chen said the group was negotiating possible takeovers or mergers with smaller steelmakers, mainly state-owned ones.