Two major iron and steel producers in east China's Shandong Province will be regrouped to form the country's second largest iron and steel group after the Baosteel, the provincial sources said on Monday.

The two producers, namely Jinan Iron and Steel Group and Laiwu Steel Group, rank the sixth and the seventh in the nation in terms of steel production. Their combined output last year totaled 20.76 million tons, about 2 million tons less than the output of the Baosteel, China's largest steel producer based in Shanghai.

"A restructuring plan has been approved by the provincial authorities," said Zeng Zhaoqi, director of the provincial State-owned Assets Supervision and Administration Commission.

Zeng did not disclose details about the plan, but said the restructuring of the iron and steel group will be basically finished by the end of coming October.

Experts said restructuring of the two companies, who are complementary to each other in terms of products, will help enhance the competitiveness of China's iron and steel industry.

(Xinhua News Agency August 1, 2006)