It is reported that China's top steelmaker Baosteel will purchase 8% stake of Zhanjiang Port Group. Analysts point out this move is to make preparation for the steelmaker's Zhanjiang steel project in transportation.

Mr Fu Yuning chairman of China Merchants Holdings Company Limited said Baosteel has bought 8% of Zhanjiang Port Group. CMHI last year invested CNY 1.6 billion for a 45% stake in the group with the rest 55% going to Zhanjiang State owned Assets Supervision and Administration Commission. He said that Baosteel's move will dilute Zhanjiang Port Authority's share to 52% and CMHI's stake to 40%.

An insider from the port group confirmed the news and released the project is waiting for government approval when approached by reporters yesterday. He also disclosed the two shareholders would jointly transfer 8% share to Baosteel, but he declined to reveal the details.

Baosteel said that it would lead several small shareholders to buy the stake and would gain 8% itself. Industry analysts believe Baosteel's move is to ensure smooth transportation for its Zhanjiang project.