Shanghai-listed Wuhan Iron and Steel Co announced plans Tuesday to issue 4.2 billion shares in a private placement aimed at raising funds to purchase assets from its parent, Wuhan Iron and Steel (Group) Corp (WISCO), China's fourth largest steelmaker by output, which experts say will ease its supply and cost pressures.

The Chinese steel producer plans to raise 15 billion yuan ($2.4 billion) from fewer than 10 investors - including its controlling shareholder, WISCO, which will subscribe to at least 10 percent of the floated shares - the company said Tuesday in a filing with the Shanghai Stock Exchange. Specifically, the company will use the raised capital to fully acquire its parent company's mining assets, including WISCO Minerals Co, WISCO International Resources Development & Investment, WISCO Brasil Investimentos em Metalurgia and WISCO (Australia) Proprietary.

Buoyed by the placement and acquisition plan, Wuhan Iron and Steel Co saw its share price jump 5.35 percent to 2.56 yuan Tuesday, the company's first trading day after a suspension which lasted for nearly a month.

"WISCO's iron ore assets, especially its stake in a Liberian iron ore project which is expected to produce 1 million tons of iron concentrate next year, are expected to help the listed arm become more self-sufficient and lower its production costs," Qian Yi, a market intelligence manager with steel industry portal steelhome.cn, told the Global Times.

Zhang Lin, an analyst with Beijing-based Lange Steel Information Research Center, echoed Qian's sentiments, but pointed out that at least 70 percent of the company's iron ore demand may still be met by imported ore.

China's steel industry has been plagued by its heavy reliance on overseas iron ore in recent years. According to customs data, the country's iron ore imports rose 8.4 percent year-on-year to 550 million tons in the first three quarters of this year.

Wuhan Iron and Steel Co is not the only listed steelmaker that has had good news to offer investors this week.

Chongqing Iron & Steel Co issued a notice Monday that its restructuring plan had been approved. The news helped the company's Shanghai-listed shares surge to the daily limit during the first two days of trading this week.

"This could be a sign that the country's steel industry is recovering after it bottomed out in late September," Qian noted.