Wuhan Iron & Steel Group, China's fifth-biggest steel maker, may buy iron ore assets and build plants overseas.
The company is considering investments in Australia, India and Vietnam, its President Deng Qilin said in an interview in Beijing. Crude steel output may rise to 22 million tons this year, up from 16 million tons a year ago, he said.
"We have spoken to many companies, and we hope to invest outside of the country," Deng said while attending the National People's Congress. "Building a plant, if any, must be close to the resources."
Wuhan joins Baosteel Group Corp in seeking to secure raw materials and gain access to other markets to compete with larger overseas rivals, Bloomberg News reported. Iron ore prices will rise for a sixth straight year from April on surging Chinese demand.
Tangshan Iron & Steel Group, China's fourth biggest, is seeking to mine iron ore in the Democratic People's Republic of Korea and may build a steel plant there, company President Wang Yifang said on Wednesday.
Baosteel, the nation's largest, plans to build a US$3.6 billion mill in Brazil.
Wuhan Steel wants to merge with Panzhihua Iron & Steel Group, though the proposal likely won't be accepted, Deng said yesterday. The China Iron & Steel Association is proposing the country should only have three to five large steel firms with capacity exceeding 50 million tons, he said.
A bid to build a 10-million- ton steel plant in Fangcheng Port in southern Guangxi Zhuang Autonomous Region may progress after the local government agreed to close plants with six million tons of capacity, Deng said.
Wuhan Steel is competing with Baosteel to expand in southern China. Baosteel is also waiting for approval from the central government to build a 10-million-ton steel plant in Zhanjiang, Guangdong Province.
China has been reining in expansion of steel capacity since 2004 because a shortage of raw materials, and won't approve new plants unless older ones are closed.
(Shanghai Daily March 7, 2008)
