On March 20, Hebei Province-based Chinese steelmaker Tangshan Iron and Steel Co. (Tangsteel), a subsidiary of Hebei Iron and Steel Group, signed an agreement to acquire a 10 percent stake in Swiss-based Duferco International Trade Holding, the world's biggest steel trader, in a move aimed at further expanding Tangsteel's presence in overseas markets, as reported by China Daily, today, March 21.
The two companies also signed a steel products structural payment agreement worth $1.2 billion, which will help the Chinese steelmaker to sell its production abroad.
Over the past year, Duferco's steel trade volume exceeded 16 million mt, roughly equal to the total output of Hebei Iron and Steel Group. By means of Duferco's distribution channels, its steel products were sold to 28,000 end-customers in European, North American and South American markets.
Duferco CEO Matthew De Morgan commented, "It is the first time that a Chinese steelmaker has invested in our company. We will help Tangshan Steel improve its technology and introduce its steel products to other international markets besides Asia."
In addition, Tangsteel president Yu Yong remarked, "After acquiring the shares in Duferco, Tangshan Steel will have more purchasing channels for raw materials besides the three international iron ore giants, and our global markets will be further diversified." Mr. Yu also predicted that Tangsteel will export 3 million mt of steel products this year and 4 million mt in 2014. He added, "By the end of 2015, Tangshan Steel will reach a stable annual export volume of 5 million tons."
The two companies had started their cooperation in 2009, when Tangshan Steel exported 67,000 mt of steel products to Duferco, with this volume rising to one million mt in 2012.