Chinese Merger Will Create Second Largest Steel Company

Two of China’s largest steel companies have announced plans for a merger, creating the world’s second largest steelmaker, as the industry struggles with global overproduction.

Under the deal, Baosteel is to take over its smaller competitor Wuhan Iron and Steel.
Both companies are majority-owned by the state.

The announcement comes as Beijing tries to overhaul the steel industry, one of the country’s bloated state sectors.
The merger will create a new company, China Baowu Iron and Steel Group. Based on data from 2015, the two firms together have an annual production of about 60 million tonnes a year, which would make it the country’s largest steelmaker.

Globally, it would be second only to Luxembourg-based ArcelorMittal.
Baosteel’s net profit tumbled 83% to 1bn yuan ($150m) last year, while Wuhan lost 7.5bn yuan, a sharp drop from its 1.3bn yuan net profit in 2014.

via BBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza