Nine Chinese companies will control 75% of steel production — SteelHome

According to the forecast of SteelHome, a Chinese consulting company, the next decade will see nine companies controlling 75% of domestic steel production in the Chinese market.

This was reported by Wu Wenzhang, Chairman and President of Shanghai SteelHome, during his presentation at the Steel Success Strategy 2020 international conference organized by World Steel Dynamics and Fastmarkets reporting agency.

Wu Wenzhang underscored that the supply side reform will result in deeper consolidation of the industry, which will become the key driver for the Chinese steelmaking.

The consolidation level is rather low at the moment. In the first eight months of 2020, the share of the ten largest steelmakers in the country in the total domestic steel output made up only 36.4%. In 2011, this indicator was 49.05%.

In 2016, the Chinese government committed to increase the share of the ten largest manufacturers in the total volume of domestic steel production to 60% by 2025.

China’s largest player in the steel market is Baowu. According to SteelHome, in January–August 2020, Baowu’s production volumes reached 95.8 million tons, a little up from the same period a year earlier (95.5 million tons).

China is the largest steel producer in the world. In 2019, Chinese steelmakers increased steel production by 8.3% to 996.34 million tons against 2018.