After five years of restructuring, China's steel industry ushers in a new chapter.
According to data from the China Iron and Steel Association, by the end of 2024, the industry’s CR10 (concentration ratio) and CR4 reached 43% and 26.9%, respectively—representing increases of 4.4 percentage points and 4.6 percentage points compared to the end of the 13th Five-Year Plan period. In 2025, a total of 16 steel companies successfully made it onto the Fortune Global 500 list, with Chinese steel firms occupying 12 of those spots—five more than at the end of the 13th Five-Year Plan. By actively pursuing deepening mergers and acquisitions, steel enterprises have not only boosted industry concentration but also enhanced their development quality, propelling the sector’s competitiveness to a new level.
The "Guiding Opinions on Promoting High-Quality Development of the Iron and Steel Industry," released in 2022, stated, "Encourage leading enterprises in the industry to carry out mergers and acquisitions and restructuring, aiming to build several world-class, ultra-large-scale companies." Steel Profiles Iron and steel enterprise group. Leveraging leading enterprises with industry advantages, Stainless steel , Special steel, Seamless Steel pipe "…cultivating 1 to 2 specialized leading enterprises in areas such as cast pipe manufacturing." Guided by this approach, steel companies have accelerated their restructuring efforts during the 14th Five-Year Plan period, driven deeply by the principles of optimizing existing capacities and pursuing a development model focused on capacity reduction, thereby shaping the core development pattern of "Baowu in the South and Ansteel in the North."
China Baowu has successively restructured Kunsteel and Xinsteel, strategically invested in Shandong Iron and Steel Group, and gained controlling stakes in Chongqing Iron & Steel, thereby establishing a regional layout along China's major rivers and coastlines that resembles "drawing a bow and notching an arrow." This strategic move has positioned the company as the world's largest and most influential steel enterprise, with its business performance consistently ranking first in the industry.
Ansteel restructured Bensteel, boosting Ansteel's crude steel production capacity to 63 million tons. This ranks Ansteel second in China and third globally among steelmakers, trailing only China Baowu and ArcelorMittal. In 2024, the restructuring of Anling further elevated Ansteel's annual crude steel output to around 70 million tons, increasing the industry concentration among the top 10 steel companies nationwide to 42%.
2023 CITIC Pacific Special Steel By joining forces with Nangang, we will forge a specialized special steel "aircraft carrier" with an annual capacity of 30 million tons, achieving the world's No. 1 position in both scale and market share. Ultra-high-strength steel It ranks first globally in the production of bar and wire products, as well as high-value-added steel plates.
On December 26, 2023, Jianlong Group officially took over management control of Xining Special Steel, committing itself to transforming the company into a leading steel enterprise group in the industry—boasting a market capitalization among the top players and reaching a production capacity of around 10 million tons. The group aims to achieve world-class excellence in key areas such as steel for new energy applications, electroslag steel, and seamless steel pipes, while striving to become a model for state-owned enterprise reform in western China.
On September 29, 2024, after Jingye Group completed the equity transfer with Rizhao Steel Yingkou Medium Plate, the two companies integrated six production lines. Medium-to-thick plates Production line with an annual output of up to 15 million tons;
…………
A series of strategic restructuring efforts has profoundly reshaped the competitive landscape of the steel industry, as the sector gradually shifts from fragmented competition toward orderly collaboration, paving the way for high-quality development to enter a new phase.
Currently, the steel industry is undergoing a period of profound adjustment and moving toward a phase of capacity reduction. Whether it's addressing the "involution" challenges on the supply side, optimizing industrial layouts, or enhancing the sector's competitiveness, mergers and acquisitions remain a crucial strategy. Yet, China's journey to increase industrial concentration in the steel sector still has a long way to go. The industry urgently needs to break down barriers and innovate its mechanisms, while firmly adhering to rule-of-law and market-oriented approaches to deepen restructuring efforts. This will help foster a development landscape characterized by balanced competition and rational industrial planning.
Employing rule-of-law-based approaches will ensure the effective implementation of "restructuring a group and phasing out another." Currently, the industry is increasingly calling for joint restructuring, driven primarily by demands to reduce overcapacity and regulate production output. If we can seamlessly integrate joint restructuring with mechanisms for orderly exit and cross-regional capacity transfer, the pace of restructuring will undoubtedly accelerate.
The "Implementation Measures for Capacity Replacement in the Iron and Steel Industry (Draft for Comments)," issued on October 24, proposes that "starting from xx month xx, 2027, capacity replacement will no longer be implemented across enterprises (groups) nationwide for ironmaking and steelmaking capacities. However, first-tier legal entities under different enterprises (groups) can achieve capacity integration and transfer through comprehensive, substantive mergers and acquisitions. Additionally, optimizing and consolidating ironmaking and steelmaking capacities among different subsidiaries of the same enterprise (group)—all operating as first-tier legal entities—is encouraged."
The policy also states, "For newly acquired compliant capacities obtained via mergers and acquisitions after June 1, 2021, which are used for project construction, the capacity replacement ratio for ironmaking and steelmaking capacities in each province (region, municipality) must not fall below 1.25:1."
This policy provides crucial support for restructuring enterprises in terms of capacity replacement and integration, and once implemented, it will help facilitate the cross-regional transfer of production capacity resources. If coupled with an accelerated pace in building a unified national market, enabling the seamless cross-regional movement of key factors such as output, energy consumption, and environmental performance indicators, the door to large-scale corporate restructuring could finally swing wide open.
Meanwhile, we must actively implement the "Normative Conditions for the Iron and Steel Industry (2025 Edition)," strengthen the coordinated management of enterprises at different levels with industrial policies, production controls, fiscal and tax measures, financial policies, and other relevant strategies, and guide resource allocation toward leading enterprises, fostering a number of pioneering, standardized companies. During mergers and acquisitions, provide special financial support to acquiring firms—such as offering preferential treatment in terms of financing costs and loan tenures—and extend policy support to listed companies, including further encouraging steel-listed firms to pursue mergers and acquisitions within the industry by acquiring assets through share issuance. These essential supporting policies will undoubtedly inject strong momentum into the process of joint restructuring.
Promote market-oriented operations and strive to "acquire one company, and succeed with each one." Looking back at the resurgence of restructuring movements in regions like Japan, the United States, and Europe, we can see that market forces have always played a pivotal role. In the future, the landscape of China's steel enterprises will primarily consist of four types of companies: ultra-large industry-leading firms, specialized leading enterprises, large-scale regionally dominant companies, and medium-to-small-sized regional supporting enterprises. To thrive in this evolving environment, steel companies must prioritize high-quality development as their core theme, adopt market-oriented operations as their guiding principle, and align themselves strategically with their targets—ensuring they select the right acquisition partners. Only then can they achieve the coveted "1+1>2" synergy effect, turning each acquisition into a resounding success.
In this process, it is necessary to deepen state-owned enterprise reforms and reduce excessive government administrative intervention, allowing industry mergers and restructuring to operate with maximum flexibility under government guidance. Additionally, establishing a joint restructuring fund for the steel industry can help alleviate financial pressures and mitigate acquisition risks faced by steel companies during consolidation efforts. Moreover, adopting flexible M&A approaches during the merger and restructuring phase will enable better control over both acquisition costs and synergy benefits—for instance, Henan Province’s recently released "Henan Province Steel Industry Quality Improvement and Upgrade Action Plan" emphasizes supporting leading enterprises—both within and outside the province—to integrate local steel resources through methods such as capital increases with equity stakes, cross-shareholding, and mixed-ownership reforms. It also encourages small and medium-sized steel firms to explore innovative collaboration models and pursue streamlined, reduction-based restructuring strategies, making these approaches worthy of emulation.
When the wind rises and sails are raised, our ambition soars across ten thousand miles of tides. We look forward to seeing the steel industry—on the grand journey ahead during the "15th Five-Year Plan"—melt away the icy grip of outdated policies, break through institutional barriers, and finally step out of the fortress of local protectionism, ushering in a new era of restructuring and, more importantly, a vibrant spring of growth and development!
