China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
The Australian reports Fortescue Metals’ Chinese shareholder Hunan Valin Steel plans to triple its capacity through mergers and capital investment and is eyeing a listing on the Hong Kong stockmarket to raise up to $1.68bn.
The Chinese government last month began another push to consolidate the country’s fractured steel industry and is planning to create six or seven mega-groups with the aim of boosting its negotiating power with iron ore giants including miners Rio Tinto and BHP Billiton. Hunan Valin is considered second-tier at the moment but wants to push production to over 30m tonnes/year, similar to industry behemoth Baosteel.
Valin was the first Chinese steelmaker to take a large stake in an Australian iron ore miner, paying $US1.27bn ($1.18bn) for a 17.4 per cent stake in Fortescue Metals Group at the start of 2009.
