The merger of Baosteel and WISCO is not an accident. Behind this century-long merger is essentially a microcosm of the development of the global steel industry. The boom fluctuation of the steel industry obeys the macro cycle, and M&A is greatly influenced by the economic situation, which means that once the economy slows down, there will be a large number of mergers and acquisitions.

The integration of steel industry mostly occurs in the period of overcapacity and industry profit compression. The reduction of competition, the improvement of efficiency, the enhancement of bargaining power and the enrichment of product lines brought by resource integration are conducive to the survival of iron and steel enterprises in the downturn of the industry. In addition, integration that can reduce competition in the same industry is often easier to complete.

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