Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Baowu Steel Group has taken a 90pc controlling interest in Kunming Iron and Steel Holding which is the majority owner of Kunsteel. 


The exchange is being labeled free of charge, according to media reports, due to Baowu’s government-controlled ownership as well as the government stake in Kunsteel. 


Under the agreement, Yunnan’s Assets Supervision and Administration Commission will retain 10pc of Kunsteel and transfer the majority to Baowu. The registration change is expected to be finalized by the state’s asset manager within six months. Kunming’s stock is primarily owned by Wuhan Iron and Steel, which is part of the Baosteel Group, at 48.4pc with Kunsteel owning 47.4pc. 


Kunming can produce 8.3mn mt of crude steel annually and recorded a net loss of $55.6mn in the first three quarters of 2020 on operating revenue of $4.3bn. The losses were attributed to the COVID-19 pandemic and a long shutdown in spring last year. 


Baowu has acquired Masteel, Taiyuan Iron and Steel, and Chongqing Iron and Steel along with managing Sinosteel. The steel producer is also in discussions with Shandong regarding a merger. Baowu is the largest steel producer in China with a capacity to produce 152mn mt annually. 

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