Baowu

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Baowu, officially China Baowu Steel Group Corporation Limited, is a state-owned heavy industrial conglomerate headquartered in Shanghai, China, focused primarily on steel production, with extended operations in advanced materials, green industrial solutions, logistics, and high-value manufacturing. It is recognized as one of the largest steel producing entities globally by total output volume.

Key moments

1978Founding of core predecessor Baoshan Iron & Steel (Baosteel) as China's first large-scale modern coastal steel complex, launched alongside the country's reform and opening-up policy
2016Merger between Baosteel and Wuhan Iron and Steel (WISCO), a longstanding major state-owned steel firm, to formally establish the China Baowu Steel Group
2021Completion of acquisitions of additional large domestic steel assets including Magang Group, drastically expanding total aggregate production capacity
2023Ranks as the world's largest crude steel producer by annual output volume after several years of targeted national industry consolidation

Baowu competes across both low-margin commodity steel segments and high-value specialty steel verticals, with its dominant position in the Chinese domestic market underpinning its global industry leadership. Its state backing and unprecedented scale create structural advantages that most competing steel producers cannot easily replicate in the current market environment.

Policy-aligned consolidation positioning: As a central state-owned enterprise, Baowu is the primary designated lead entity for Chinese national steel industry consolidation efforts, giving it priority access to acquire underperforming smaller domestic steel assets to grow market share without heavy competition from large private peers
High-value segment R&D progress: Baowu has invested heavily in research for high-grade automotive, aerospace, and electrical steel that was previously dominated by Japanese and European steel conglomerates, allowing it to capture a larger share of China's domestic high-value manufacturing supply chain
Sustainability transition lead: Its large capital base enables faster deployment of low-carbon steel production technologies including hydrogen reduction and scrap steel recycling infrastructure, meeting growing demand from global downstream manufacturers for emissions-compliant steel inputs
Raw material bargaining power: Its massive total iron ore demand gives Baowu far more negotiating leverage with global seaborne iron ore miners than smaller, fragmented Chinese steel producers, helping it control input costs more effectively.

Overview

China Baowu Steel Group

type	State-owned enterprise
industry	Steel
foundation	1978
predecessor	Shanghai Baosteel Group Corporation Wuhan Iron and Steel Corporation
key people	Hu Wangming (Chairman)
products	Steel, flat steel products, long steel products, wire products, plates
revenue	US$157.216 billion (2023)‡R1R‡

assets	US$191.964 billion (2023)‡R1R‡

num employees	382,894 (2023)‡R1R‡

owner	Chinese Central Government (100%)

parent	State-owned Assets Supervision and Administration Commission of the State Council

subsid	see list

homepage	www.baowugroup.com

footnotes	‡R2R‡

location	Shanghai, China

China Baowu Steel Group Corp., Ltd., commonly known as Baowu, is a state-owned iron and steel company headquartered in the Baosteel Tower in Pudong, Shanghai, China.[3] The company was formed by Baosteel Group absorbing its smaller state-owned peer, Wuhan Iron and Steel Corporation in 2016. It is the world's largest steel producer.[4]

In 2015, Baowu was the second largest steel producer in the world measured by crude steel output, with an annual output of around 35 million tons (China's total steel production in 2015 was 803.8 million tons[5]), and employed 130,401 employees as of the end of 2012, had annual revenues of around $21.5 billion, and produces a mix of products.[6] In 2019, the company closed the gap with ArcelorMittal reaching 95.47 million tons of steel, and hitting $78 billion in revenues,[7] with 195,434 employees.[8]

According to World Steel Association (Chinese companies data were provided by China Iron and Steel Association), the corporation was ranked the 5th in 2015 the world ranking by production volume (2nd in China for 34.938 million metric tons).[9] A plan to merge with Wuhan Iron and Steel Corporation was announced on 21–22 September 2016,[10] which would make the combined production volume the second highest in the world (34.938 million + 25.776 million), after ArcelorMittal (97.136 million in 2015), surpassing Hesteel Group (47.745 million in 2015). Since Baosteel Group and Wuhan Iron and Steel Corporation also announced targets of cutting 3.95 and 4.42 million metric tons production capacity respectively in June[11] and July 2016,[12] and a further cut for Baosteel Group of 2.10 million while a 3.15 million cut was already planned[13] the final ranking may still significantly change.

The IPO of the subsidiary of Baosteel Group on the Shanghai Stock Exchange in 2000 was the largest in China up to that time, raising CNY 7.7 billion despite being limited to domestic investors only.[14]

History

Baoshan Iron and Steel

In 1978, as part of the Chinese government's reform and opening, Chinese paramount leader Deng Xiaoping sought to develop large-scale steel production in China.[15] The government planned for a large integrated steel production facility to be located near the port of Shanghai, in Baoshan District, a suburb of Shanghai.[15] In 1978, a delegation from the Chinese government, including Deng Xiaoping himself, visited a steel mill operated by Nippon Steel to learn how to construct such a large facility.[15] As the government's flagship steel company, Baoshan Iron and Steel (Baogang) as it was originally called, benefitted from acquiring the engineers and managers, access to technology, and receiving government contracts.[16]

Subsidiaries

Steel plants
Baoshan Iron and Steel (sse: 600019 nocat)
Baosight Software
Shanghai Meishan Iron and Steel (77.04%)
Wuhan Iron and Steel Company (100%)
Zhanjiang Iron and Steel
Shanghai First Iron and Steel Co., Ltd.
Shanghai Second Iron and Steel Co., Ltd.
Shanghai Pudong Iron and Steel Co., Ltd.
Shanghai Fifth Iron and Steel Co., Ltd.
Guangdong Shaoguan Iron and Steel (51%)
SGIS Songshan Co., Ltd. (53.37%, szse: 000717)

Equity investments

Baosteel Group was a minority owner of Metallurgical Corporation of China Limited for 0.65% (as of 30 June 2010).[40] Excluding the investment held by the listed subsidiary Baoshan Iron and Steel, Baosteel Group owned 0.88% stake (via Hwabao Investment) in PetroChina Pipelines, the company that runs West–East Gas Pipeline.[41]

Baosteel Group, as of 31 December 2015, still owned 15.11% stake in New China Life Insurance, a listed company in both Hong Kong and Shanghai Stock Exchange,[42] as well as China Bohai Bank for 11.67% stake,[43] China Pacific Insurance for 14.17% stake.[44]

External links

Detailed History of Baosteel

References

China Baowu Steel Group Fortune GLobal 500, Fortune, retrieved 2024-08-24^
About Baosteel retrieved 2009-12-11^
"Contact Us." Baosteel. Retrieved on November 10, 2012. "ADD:Baosteel Tower, Pu Dian Road 370, Pudong New District, Shanghai, 200122, P.R. China Postal Code:200122" -