Brussels: ArcelorMittal, the world’s largest steel maker, said on Monday it bought 90% 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 Corp, 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% stake in the Laiwu Steel, for $258 million. Parent company Laiwu Steel Group would have a matching stake of 38%, 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.