Tangshan Iron and Steel Group Co, or Tangsteel, has acquired a 10% stake in Swiss- based Duferco International Trade Holdings, the world’s largest steel trader. The move was jointly announced last Wednesday 10 April.
The two companies also signed a structured steel prepayment agreement worth US$1.2bn which will help Tangsteel expand in the overseas market and avoid international trade issues. “Cooperation with Duferco brings us not only product orders but also advanced concepts in market, corporate culture and management skills,” said Yu Yong, president of Tangsteel. “In the past we had no idea about specific international clients of our products and their feedback. Now our products will be on a more international platform with the support from Duferco.”
The volume of steel traded by Duferco was more than 16Mt in 2012, which ranked it first as a trader worldwide. Production of Tangsteel was more than 18Mt last year. The two companies started working with each other in 2009, leading to 67kt of steel exported from Tangsteel in the early years and then over 1Mt last year. According to figures from the Ministry of Commerce, there have been at least 17 anti-dumping cases against Chinese steel producing companies since the beginning of 2012. MIIT statistics showed losses in the steel industry in 2012 in China reached RMB 28.9bn ($4.61bn) in 2012.
Exports were essential in using the excess capacity in China’s steel industry but the low price strategy of Chinese companies made them targets of antidumping investigations, said Wang Dayong, secretary-general of Metallurgical Industry Association of Hebei.
Source: China Metals e-mail firstname.lastname@example.org