A report by the Bloomberg Intelligence economic analysis service warned that the steel crisis in China is paving the way for a wave of bankruptcies and accelerating the mergers that the sector needs.

Michele Leung, a senior analyst at Bloomberg Intelligence, said that about three-quarters of steel companies in China suffered losses in the first half of this year, and many of them are likely to declare bankruptcy.

Leung said that the companies “Xinjiang Ba Yi Iron and Steel”, “Gansu Jiu Steel Group” and “Anyang Iron and Steel Group” are the most vulnerable to bankruptcy in the coming period, and may be acquired by competitors.

Bloomberg Intelligence reported in its report, as quoted by the German News Agency, that the expected wave of mergers will help Beijing encourage further concentration of the Chinese steel industry.

The government wants China’s top five steelmakers to have 40% of the market and the top 10 to have 60% by 2025.

Leung said the target was achievable, although China would still be far behind Japan and South Korea in terms of the size of its steel majors.

China’s ongoing property crisis and slowing economic growth are reshaping the country’s massive steel industry, with warnings of a crisis worse than those in 2008 and 2015.