The Chinese bought 10% of the shares of the largest metal trader Duferco

The Chinese metallurgical company Tangshan Steel, the sales unit of the largest manufacturer steel in the HEBEI Group, bought out 10% of the shares in the Swiss Duferco International Trading Holding, which is the Ukrainian Industrial Union of Donbass (ISD). This was reported in Reuters.

The transaction concluded last week will give Duferco an exclusive right to sell Chinese steel outside Southeast Asia.

"This deal will give us a significant increase in sales volumes and improve the range of proposed metal products, which in turn will sell a wider range of products with a high additional cost," said Mr. Matthew de Morgan, Executive Director of Duferco International Holding.

Tangshan Steel production capacities make it possible to offer an additional 18 million tons of metal rolling, mainly leaf and roll steel used in auto -building, energy industry and with high added value.

Hebei Group will thus receive practically unlimited access to the Duferco international sales network, which will help the Chinese metallurgical company significantly increase its export.

"Excessive capacities in China is still a very big problem and it is not yet visible," says market analyst Chris Housen. "The problem of overproduction in the Chinese domestic market is so great that any imbalance between demand and supply can have a great influence on export markets especially given that the Chinese are ready to reduce profitability."

As we have already reported, last week, fearing just such a turn of events, American metallurgists called on the Senate and the White House to introduce restrictive measures against the probable wave of Chinese import of steel.

"For China officials, profit from production has become in second place, the main thing is to ensure employment and tax revenues of the region entrusted to it," added Jolden.

Tangshan Steel is not the first steel manufacturer to purchase a share in Duferco. The Ukrainian Industrial Union of Donbass (ISD) has long owed a share in the company and is actively using the marketing agreement with Duferco.

The ISD with metallurgical capacities in Ukraine more than 10 million tons of steel per year will not be conflicting with the Chinese, as the portfolio of the products offered and the geographical orientation of sales do not overlap, the Duferco director Matthew de Morgan emphasized.

The ISD is focused on the steel semi -finished products and varietal metal rolling for construction loved by all Ukrainian metallurgical companies, which is sold mainly on the territory of the former USSR, Europe, Africa and the Middle East.