China's Tianjin merges 4 steel firms into new giant
BEIJING (Reuters) - Four steel companies in the northern Chinese city of Tianjin have announced that they will merge as part of a central government plan to consolidate the sector, the local municipal government said on Wednesday.
The new Bohai Steel Group, launched on Tuesday, consolidated the assets of Tianjin Steel Pipe Group, Tianjin Iron and Steel Group, Tianjin Tiantie Metallurgy Group and Tianjin Metallurgy Group, according to the announcement.
The aggregate crude steel output of the four companies stood at around 20 million tonnes in 2009, which would put it seventh among China's biggest steelmakers last year.
On Monday, the Ministry of Industry and Information Technology announced new plans aimed at pushing forward consolidation in the country's huge but fragmented steel industry, where state-owned giants vie with thousands of small private operators.
It said it would encourage state-owned companies to absorb smaller market players by adjusting industry entry standards and product quality regulations, and also threatened to cut off iron ore supplies to companies that failed to comply.
China plans to put 60 percent of total national steel capacity in the hands of its top 10 producers by 2015, up from 44 percent at the end of last year, but has so far struggled to meet its consolidation targets in the face of reluctance from small mills and local governments.
(Reporting by David Stanway; Editing by Chris Lewis)