The
steel crisis in China may lead to bankruptcy of companies and accelerate the
consolidation of the industry. This is reported by foreign media.
In the first half of 2024, almost three quarters of Chinese
steel companies suffered losses and are on the verge of bankruptcy. In
particular, Xinjiang Ba Yi Iron companies & Steel Co., Gansu Jiu Steel
Group and Anyang Iron & Steel Group Co. are at risk and may become
potential takeover targets.
From the point of view of experts, asset consolidation will help
to increase opportunities in the steel industry. The Chinese government intends
to optimize assets by 2025 so that the five largest companies control 40% of
the market, and the ten largest companies control 60%.
The ongoing slowdown in economic growth in China is forcing the
government to rebuild the steel industry amid falling domestic demand, which
has led to an increase in exports, causing a negative trade reaction from other
countries due to lower metal prices below cost.
According to most economists, the housing construction program
in China offers the best way for the country's economy to grow by 5%. At the
same time, Chinese banks may conduct a new round of mortgage rate cuts to help
support weakening consumption.
Read also in our Telegram channel "Mergers
and acquisitions. AK&M»
