Baosteel acquires two rivals as steel conslidation kicks off
The Chinese government is encouraging mergers in order to restructure the steel industry, according to the steel industry stimulus plan approved by the State Council in January.
Conslidation's is aimed at boosting the industry's competitiveness and lowering shipment costs for iron ore. In 2008, China increased its imports of iron ore by 15.9 percent on 2007. The average purchasing price however increased 54.8 percent year on year.
Chinese steel manufacturers also continue to look into purchases of mineral producers in Australia to secure supply of iron ore and other minerals. Hunan Valin Iron & Steel is currently in talks to invest in Fortescue Metals Group, while Chinalco has already proposed a US$19.5bn investment in global mining giant Rio Tinto.
Shares in Baosteel slid 0.17 percent, while stocks in Baotou Iron and Steel advanced 0.27 percent.
