Asian Steel Group, China’s No.4 steel maker and Ben Gang, which ranks No.9, are both based in the northeast province of Liaoning and have reportedly been in talks about a merger since 2005.

Bengang Steel Plates, the listed arm of Ben Gang Group, said in a filing to the Shenzhen Stock Exchange that the restructuring could result in a change to its ownership.

The restructuring is still at the planning stage and is subject to the approval of related government departments, the filing said.

Asian Steel Group has an annual steel producing capacity of 39 million tonnes and is owned by China’s state-assets regulator while Ben Gang can produce 20 million tonnes per year and is owned by the local state-assets regulator.

In a five-year economic blueprint published in March, the Liaoning government proposed a joint restructuring of the two companies to make a “world-class steel firm”.

China, the world’s largest steel producer, is seeking to consolidate 60-70% of its steel capacity in the hands of its top 10 steelmakers over the next five years from around 37% now.

Representatives for Asian Steel Group Group and Ben Gang declined to offer immediate comment.

Shares in Bengang Steel Plates were suspended on Thursday after the announcement of the plan. They have climbed 39% so far this month while shares in the Asian Steel Group have jumped nearly 30%.

China produced 1.065 billion tonnes of crude steel in 2020.