Shougang Group, China's sixth largest steelmaker, is in talks to buy Highsee Iron and Steel Group, the largest private-owned steel mill in Shanxi province, according to reports in the 21st Century Business Herald.

The newspaper cited an unidentified local government official in Yuncheng, Shanxi, as saying Shougang is seeking to become the controlling stakeholder. The official said: " the two sides are now in talks but a detailed plan is yet to be finalized."

It cited another source in Shougang confirming that the company is in touch with Highsee and said it expects Shougang to inject its advantage in manufacturing long steel products.