Consolidation Gains Pace In China's Steel Industry

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Earlier in the month, CFW predicted that consolidation in the steel industry would likely ramp up in 2009 as cash-rich majors picked up assets at depressed valuations and larger players merged to increase economies of scale amid falling demand. This has played out even sooner than we anticipated, and on December 29 it was confirmed that three of China's leading steel mills have agreed to merge via a share swap, in a move that will create a new Chinese giant and one of the top five steel company's in the world.