China's Rizhao, Shandong Steel agree to consolidate
SHANGHAI, Nov 6 (Reuters) - China's Rizhao Iron and Steel, one of China's largest private-sector steel mills, has signed an agreement to consolidate with a state-owned rival, the official China Securities Journal said on Thursday.
Rizhao and Shandong Iron and Steel, located in eastern China's Shandong province, signed a letter of intent on consolidation on Wednesday, the paper said. It gave no further details.
Fast-growing Rizhao produces 8 million tonnes of crude steel annually and has attracted analysts' attention for its high profit margins.
Consolidation has progressed slowly but steadily in China's fragmented steel sector, with encouragement from the government.
The state-owned parents of Laiwu Steel Corp (600102.SS: Quote, Profile, Research, Stock Buzz) and Jinan Iron and Steel Co (600022.SS: Quote, Profile, Research, Stock Buzz) have merged to form Shandong Iron and Steel Group, although they have yet to give a time frame for a formal combination of their equity. (Reporting by Alfred Cang; Editing by Edmund Klamann)