Posted on 06 Aug 2021
Delong Group, a privately-owned Chinese steel producer with steel plants in Tangshan of Hebei and Tianjin, both in North China, will merge its steelworks in Tangshan with another local privately-owned wire rod producer - Qian’an Jiujiang Wire Rod Co (Jiujiang Wire) to help with “further integration of Tangshan steel industry”, according to the company releases on August 3-4.
The two steel companies held a formal meeting on July 31 to mark Jiujiang Wire’s taking a controlling stake in Tangshan Delong Iron & Steel Co (Tangshan Delong) - Delong’s Tangshan steelworks, Jiujiang Wire shared via its WeChat official account on August 4.
Tangshan Delong officials could not be reached for comment on August 4 and Jiujiang Wire officials declined sharing more details on the matter.
Delong Group commented in a company WeChat sharing on August 3 that Tangshan Delong and Jiujiang Wire “will form a win-win cooperation...in production and sales of wire rods and welded pipes”, and the merger will “facilitate the two parties’ engagement in further integrating Tangshan steel assets and lay a solid foundation to enhance the companies’ market power and competitiveness”.
Tangshan Delong is capable of producing 559,100 t/y of welded pipe, or accounting for 15% of the domestic market share, and Jiujiang Wire is Asia’s largest wire rod production base with around a 10 million t/y of capacity, Delong’s post showed.
A Tangshan source that is close to Delong Group said that Delong’s sharing the Tangshan subsidiary with Jiujiang Wire may have to do with the needs to collect capital for the investment in the Simandou iron ore mine in Guinea, West Africa, which is “to respond to Beijing’s call for higher self-sufficiency on steelmaking raw materials”.
Ding Liguo, chairman of Delong Group did disclosed at a recent China Iron & Steel Association (CISA) event on July 28 that it “will possibly participate in developing the Simandou iron ore mining project”, according to a post of China Metallurgical News, an official publication of CISA.
Delong-Jiujiang deal is part of China’s ongoing mergers and acquisitions among the Chinese steel mills, as it is widely acknowledged that the country has been striving to enhance the concentration in the sector with its top ten steelmaker to contribute to 60% of the country’s total steel output by 2025, a jump from the 39% in 2020.
Delong was incorporate in 2000 in Xingtai of Hebei with a 3 million tonnes/year hot rolling capacity, but by the end of 2020, it boasted 35 million t/y steelmaking capacity after its takeover of the 28 million t/y Bohai Steel Group (Bohai) in Tianjin in 2019, and its crude steel output was at 28.3 million tonnes, or China’s eighth largest steelmaker, according to the data from the World Steel Association and Delong Group.
At present, Delong is also running a 1.5 million t/y steel mill under PT. Dexin Steel Indonesia in Sulawesi of Indonesia.
Source:Mysteel Global
