History of China Baowu Iron & Steel Group.

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History of China Baowu Iron & Steel Group

In 2021, the China Baowu Group was the largest steelmaker in the world, producing ~120 million tonnes (mt) of steel.

The timeline below covers the history of the firm.

  • 2016: Baowu formed from acquisition by Baosteel of Wuhan Iron & Steel.
  • 2016: Business renamed as China Baowu Iron & Steel Group Co.
  • 2017: Baowu considers major stainless steel investment in Shadong.
  • 2018: Baowu reportedly in talks to take over rival Magang Group.
  • 2019: Takes 51% stake in Magang Group Holding Co (Maanshan Steel).
  • 2019: Sets up JV with Japan's JFE Steel Corporation.
  • 2020: Plans purchase of controlling stake in Chongqing I&S.
  • 2020: Considers role in development of Simandou ore mine, Guinea.
  • 2020: Takes 51% stake in Taiyuan Iron & Steel (Group) Co Ltd (TISCO).
  • 2020: Acquires land for Baosteel’s first canmaking plant in Malaysia.
  • 2021: Opens 2.8 mt/year steel scrap processing and production facility in Anhui.
  • 2021: Takes 90 percent ownership stake in Kunming Iron and Steel Holding.
  • 2021: Signs deal with Saudi Aramco to build steel plate plant in Saudi Arabia.
  • 2022: Acquires 51% equity in Xinyu Iron & Steel Co Limited (Xinsteel).

  • 2016: The Q3 2016 acquisition of Wuhan I&S (Wisco) by Baoshan Steel was considered by many industry observers to be the first step in the creation of a steel producer second only in output to ArcelorMittal.
  • 2016: Baoshan Iron & Steel Co was renamed as the China Baowu Iron & Steel Group Co in November 2016.
  • In mid-2017, Baowu Steel signed a memorandum of co-operation with Shandong Xinhai Technology Co relating to investment in a stainless steel plant in Shandong province. This new facility will reportedly produce up to 3.8 mt/year of stainless steel and 1.8 mt/year of nickel pig iron.
  • Baowu's strategy is to reach 100 million tons of capacity by 2021 (from 70 million tons in 2017); acquisition of Magang Steel Group thus fits in wi the strategic objectives of the firm. Baowu and Magang are geographically close to each other, with Magang headquartered in Maanshan city in China's eastern Anhui province (a four-hour drive from Shanghai, where Baowu Group is based). Baowu mainly produces flat steel products. Magang's output includes both flat and long steel products.
  • June 2019 acquisition by Baowu Iron and Steel Group of a 51% equity stake in Magang Group Holding Co Ltd [referred to as a 'merger'] took Baowu’s total production capacity from 70 million tons to 90 million tons, bringing it closer to the 113-million-ton total capacity of ArcelorMittal, the world's largest steelmaker. Magang Steel is also known as the Maanshan Iron and Steel Company Limited, or Maanshan Iron and Steel; or just Masteel.
  • 2019: The JFE Steel Corporation joint venture was with a Baowu subsidiary, the Guangdong Shaoguan Iron and Steel Songshan Co (SGIS). Under the jv agreement, JFE Steel got a 50% share of Baosteel Special Steel Shaoguan Co, Ltd (BSSS), a 100% subsidiary of SGIS, for the production and sale of specialty bar steel.
  • 2020: Press comments in January 2020 mentioned Baowu's plans to acquire a controlling stake in Chongqing Iron and Steel Co Ltd. That same month, Chongqing's holding company - the Four Rivers Investment Management Co Ltd - signed a letter of intent with China Baowu regarding the transferring of a controlling equity stake, in a deal that was expected to be completed by mid-2020. In its development plan published in November 2017, China Baowu set the strategic goal of expanding steel output from 80 million tons by 2021. The acquisition of Chongqing Iron and Steel Co Ltd allows Baowu to attain this goal.
  • 2020: Simandou is one of the largest high-grade iron ore deposits in the world, but it has struggled to enter production for years. Industry experts consider that the cost of getting the mine operational (including investment in a cross-country railway and deep water port) could be as high as $15 billion.
  • 2020: Purchase consideration for the 51% equity stake in TISCO was $2.1 billion. Taiyuan Iron & Steel is China's second-biggest stainless steelmaker after Tsingshan, and has an annual steel capacity of 12.9 million tonnes, including 4.5 million tonnes of stainless steel.
  • 2020: In August, the company reported the signing of a deal to acquire land at Puncak Alam in the Klang Valley of Selangor state in Malaysia. The company spent RM53.3 million (approx US $12.7 million) on this transaction, buying a 16-acre site at Eco Business Park V.
  • 2021: New scrap processing facility in Anhui province involved an investment of 440 million yuan (~US $68.35 million). It will be operated as a Baowu subsidiary, Ouyeel Blockchain Finance and Metal Recycling Resources Co Ltd.
  • 2021: Steel plate mill to be built as a joint venture with Saudi Aramco, for production of high value heavy plate.
  • 2022: The Xinsteel Group is located in Xinyu City in Jiangxi Province and has an annual crude steel capacity of ~10 million tonnes / year. This acquisition should be understood in the context of Baowu Steel's plan to attain crude steel output of 200 million tonnes / yr by the end of 2025 via the acquisition of multiple steel enterprises.

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