Chinese Steelmaker Signs Agreement to Buy Serbian Mill

4/18/2016 – China's Hebei Iron and Steel Group has signed an agreement to buy an unprofitable steel mill in Serbia, according to reports.

The steelmaker was the only bidder for the nationalized Zelezara Smederevo mill, which Serbia bought back from United States Steel Corporation in 2012. Hebei Iron & Steel bid EUR46 million (US$52 million) for the facility.

Reuters reported that the company plans to invest US$300 million in the plant and increase its production from 875,000 metric tons to 2.1 million metric tons annually over the next three to four years.

The signing comes as global steel industry representatives and government officials huddled in Belgium for a symposium on the world's excess steelmaking capacity. The summit was organized by the Organisation for Economic Co-operation and Development and the Belgian government.

"The overarching focus of the high-level symposium will be on promoting structural adjustment in the steel industry and reducing excess capacity by removing distortionary government policies and through industry restructuring," the OECD said in a statement.

"An important long-term goal is to improve the economic viability of the global steel industry and help reduce trade frictions amongst trading partners," it said.