Chinese manufacturers Anshan and Bengang will become one after 16 years?

China's ferrous metals are booming as, amid a surge in domestic steel prices since late March, Shenzhen-listed Angang Steel Co and Bengang Steel Plates Co are subsidiaries of two of Northeast China's largest steel mills.

The uprisings were in response to renewed hope that Anshan Iron & Steel Group (Ansteel) and Bengang Group (Bengang) can finally become one family after an initiative from 2005.

Investors holding these two shares in the steel industry could finally get paid for their faith if the long-awaited merger finally materializes, although no progress has been formally made since the registration of the new venture - Anben Iron & Steel Group - on August 16, 2005.

In the end, market expectations may not be wishful thinking this time around as the Liaoning Provincial government has mentioned its intention to help complete the merger of the two provincial-headquartered steel mills as part of its state optimization efforts. during the period of the 14th five-year plan (2021-2025), when the development plan until 2025 and 2035 was published on April 6.

Ansteel officials have denied receiving any formal notice from the provincial government, although one reported that Ansteel and Bengang have begun comparing their finished steel product designs.

However, a Bengang spokesman confirmed the news of the integration, noting that several related departments of both steel mills have begun exchanging information on day-to-day operations.

According to the China Iron & Steel Association, Ansteel is the fourth largest steel producer in China in 2019, producing 39.2 million tonnes of raw steel, with the main product being carbon steel flat products, including hot rolled and cold rolled coil, galvanized steel and color coated steel. for the production of auto and electrical appliances.

Bengang produced 16.1 million tonnes of crude steel in 2019 with a similar finished steel structure as Ansteel.

It has been 16 years since the two companies were first heard of the merger, and they were also the first Chinese steel mills to talk about mergers and acquisitions. However, China Baowu Steel Group (Baowu) and HBIS, two latecomers, have already started operations, and the name Anben has been around since 2005.

It has even been suggested over the years that Anben may well exist simply by name, as it was once assumed that Ansteel would be acquired by Baowu and Bengang by Fosun Group, the majority shareholder of Nanjing Nangang Iron & Steel United Co.

To date, the biggest obstacle to a merger is the different ultimate ownership, although both Ansteel and Bengang are claimed to be owned