A third steel industry restructuring fund was set up in China’s Shanxi province worth 5 billion yuan ($770 million), state newspaper Securities Times reported on Tuesday.
The fund is the third in China aimed at pushing ahead with consolidation and upgrading of the nation’s steel industry. The newspaper did not cite sources nor disclose the names of companies that have put money into the fund.
China’s biggest state-owned steelmakers are under pressure to rationalise operations and rise up the value chain as part of a state plan to revitalise a sector saddled with debts and a price-sapping capacity glut.
China’s top steelmaker Baowu Steel Group set up the Siyuanhe fund with other companies in April, with between 40 billion and 80 billion yuan, according to local media reports.
Second-biggest steelmaker Hebei Iron & Steel Group also helped start up a similar fund at 10 billion yuan in July. Siyuanhe fund provided funding to Chongqing Changshou Iron & Steel to help restructure debt-ridden Chongqing Iron & Steel, Chongqing Steel said in September. China, which produces and consumes half the world’s steel, has cut about 115 million tonnes of legal capacity and another 120 million tonnes of illegal capacity since January 2016.