Steel companies continue their restructuring with plans set for Anshan Iron and Steel Group (Ansteel), Pangang Group and Benxi Iron & Steel Group to form a new group.

"Previously, Ansteel and Benxi Iron & Steel Group merged to establish Anshan & Benxi Iron and Steel Group, and now it incorporates Pangang Group. The three companies will form a new group, where they will also become the subsidiaries of the new group," an insider from Ansteel said.

The source also disclosed that Zhang Xiaogang, general manager of Ansteel will become chairman of the new group, while the vice chairman is still undecided.

To push forward the restructuring, Li Chengyun, vice mayor of Sichuan Province and officials from Pangang visited Ansteel on April 7, and a month earlier, Ansteel officials also visited Pangang. Both sides have held discussions on restructuring and the development of the steel industry.

Currently, Ansteel's productivity is 25 million tons, while the capacity of Benxi Iron & Steel Group is 11 million tons, and Pangang's is 10 million tons. After the three steel makers merge, the capacity is expected to reach 46 million tons, topping the capacity of the domestic market.

In 2009, Ansteel saw profits of 3 billion yuan ($439.43 million), Benxi Iron & Steel Group lost 1.96 billion yuan ($287.1 million) and Pangang reported a loss of 1 billion yuan ($146.48 million)