Baosteel Group and Wuhan Iron and Steel Group, two of China's largest steel makers, are together planning to restructure, the companies said in separate stock exchange filings.
Baosteel Group is China's second-largest steel maker, and Wuhan Iron and Steel Group is the country's sixth-largest in terms of 2015 output.
The companies did not specify what the restructuring would entail. Beijing has said that mergers would be a key way to consolidate the country's steel industry, aiming to cut overcapacity and increase the proportion of output from China's 10 biggest mills.
China has vowed to tackle price-sapping supply gluts in major industrial sectors. On Sunday, the head of the country's top economic planner said the government aims to cut 45 million metric tons of steel capacity and 280 million metric tons of coal production this year.
China's Baoshan Iron and Steel Co. and Wuhan Iron and Steel Co. said in stock exchange filings that their parent companies are planning to restructure.
The details of the restructuring have not yet been finalized, and once they are settled the deal still would need regulatory approval, the companies said.
In 2013, China's industrial regulator said it aims to consolidate 60 percent of the nation's steel capacity within the top ten steel mills by the end of last year. By that time, those mills controlled 34 percent of the total capacity.
Source:Automotive News China