Guangdong Province-based Chinese steelmaker SGIS Songshan Co., Ltd (SGIS Songshan), a subsidiary of Guangdong-based steel producer Shaoguan Iron and Steel Co., Ltd (SGIS), has announced that it plans to sell all its steel business assets and acquire non-steel business assets belonging to major Chinese steelmaker Baosteel.
SGIS Songshan has incurred severe losses in the past two years due the imbalance between supply and demand in the domestic steel industry and the continuous declining trend of finished steel prices. It has stated that for the whole of 2015 it expects to record a net loss of RMB 2.1 billion ($0.32 billion) compared to the net loss of RMB 1.39 billion recorded in 2014. Meanwhile, trading of the company’s shares has been suspended since February 1 this year.