Shagang cuts stake in listed steel unit

The decision by the nation's largest private steelmaker, Shagang Group, to sell 55.1 percent of the shares in its Shenzhen-listed unit Jiangsu Shagang Group Co Ltd, was intended to raise funds for diversification beyond steel, analysts said.

The steel sector has been under pressure from overcapacity, rising raw material costs and weak demand for the past three years, and 2015 will be no different, they said.

This situation has forced companies, even those such as Shagang that remain profitable, to look at transformation, said Zhang Lin, a senior researcher at the Lange Steel Information Research Center.