A Chinese woman walks past the stand of WISCO Group (Wuhan Iron and Steel (Group) Corporation) during an expo in Beijing, December 21, 2005.[Photo/IC]

As two state-owned steelmakers restructure their major assets in view of merger, the shares of their listed units continue to be suspended for at least one month, Wuhan Iron and Steel (Group) Corporation said in an interim statement.

Wuhan Iron and Steel (Group) Corporation, China's fourth-largest steelmaker by output, planned to reorganize the assets of the iron and steel business with one of its rivals Baosteel Group Corporation, according to Wuhan Iron and Steel Co Ltd.

The move was preliminary, since they haven't signed the framework or agreement of intent, according to the previous announcements by the two steel producers.

The merger between the two largest Chinese iron and steel groups would play a leading role in reducing excess capacity of the industry, Li Lingxuan, an analyst at commodities consultancy Sublime China Information Co Ltd, was quoted as saying by National Business Daily.

Li said the task of taking capacity off, to date, hasn't meet expectations.

Daily output by major iron companies averaged 1,698,600 tons in the first half month of April, up 4.8 percent from the same period over the last month, showed data compiled by China Iron and Steel Association.

During the suspension, according to Wuhan Iron and Steel Co Ltd in a statement, the company would carry out audits, address legal and financial issues, and perform a due diligence review.