BRUSSELS: ArcelorMittal, the world's largest steelmaker, said yesterday that it bought 90 per cent of Chinese steel wire company Rongcheng Chengshan Steelcord for $26.6 million. The Shandong-based business, which was privately owned, specialises in steelcord wire and bead wire used for reinforcing vehicle tires. It expects turnover to hit $71 million this year. China is the largest steelcord wire market in the world, supplying the world's largest tire manufacturing base.
ArcelorMittal said the purchase was a sign of its commitment to the broader Chinese steel market.
Meanwhile, the company's bid for mid-sized steelmaker Laiwu Steel, also based in Shandong, has stalled, with Chinese regulators demanding a higher price to let the deal go through, a Laiwu spokesman said in March.
Arcelor SA agreed more than a year ago to buy a 38 per cent stake in the Laiwu Steel, for 2 billion yuan ($258m). Parent company Laiwu Steel Group would have a matching stake of 38pc, with most of the remainder to be sold by initial public offering on the Shanghai Stock Exchange.
China is the world's biggest steel producer and consumer, using about a third of all steel produced worldwide. The government is pushing small and medium-sized steelmakers to tie up with larger ones to help improve competitiveness and upgrade technology, but foreign investment in the domestic industry remains limited.