China Baowu Steel Group Cooperation (CBSGC), the result of a merger between China's two steel giants Baosteel and Wuhan Steel, was officially established on Dec. 1, becoming the world’s second largest steelmaker after ArcelorMittal.

A grand opening ceremony was held in Shanghai on Dec. 1, attended by Han Zheng, the Communist Party Secretary of Shanghai; Yang Xiong, mayor of Shanghai; and Xu Kezhen, vice governor of Hubei province. The president of CBSGC, Ma Guoqiang, remarked that the company will optimize resource allocation and work for synergistic effects within the world-class enterprise.

With assets valued at 730 billion RMB, CBSGC will achieve a yearly revenue of more than 330 billion RMB. The group now has a total of 228,000 employees, and its output ranks second in the world. About 60 million tons of crude steel will be produced by the company each year.

In line with a government effort to concentrate the scattered industry, Baowu Steel has cut a total of 10 Mtpa of its steel capacity in 2016. In addition, the group is planning to cap its capacity at around 75 million tons worldwide next year, a figure that still makes the company the second largest steelmaker in the world.