+86 371 55057610



Hebei Iron and Steel buys controlling stake in trader Duferco


China’s Hebei Iron and Steel Group has agreed to acquire a controlling stake in global steel trader Duferco, as the country’s steel exports rise to a record.

This is believed to be the first example of a state-owned Chinese steel company taking a majority shareholding in a global metals trader.

It is also the latest indication of Chinese companies expanding overseas as Beijing reduces restrictions on outward investment.

Hebei Iron and Steel, China’s largest producer, is to take a 51 per cent stake in Duferco, according to Chinese media reports. Duferco, which is headquartered in Luxembourg and has offices in Belgium, Italy and Switzerland, confirmed that Hebei Iron and Steel would have a majority stake but did not give further details about the shareholding.

Hebei Iron and Steel will make use of Duferco’s “global marketing and distribution presence coupled with access to international structured financing to strengthen its position as a global steel supplier”, the two companies said in a statement.

“The strategy of internationalisation is the inevitable path and an important support for our future development,” said Yu Yong, chairman of Hebei Iron and Steel.

China’s steelmakers have enjoyed record exports this year as a slowdown in the Chinese economy has weakened demand.

They have expanded their export markets from South Korea and the US to other countries in southeast Asia such as Indonesia and the Philippines as well as Latin America, according to metals consultancy CRU.

The Chinese government is also trying to control pollution by introducing more stringent environmental standards.

The Hebei provincial government said this week it would encourage its companies to move production overseas as part of a regional plan to rein in coal use on the polluted north China plain.

In September, Hebei Iron and Steel announced plans to build a 5m tonne mill in South Africa.

In China prices for steel dropped to their lowest level since 2003 last month, according to the China Iron and Steel Association.

Duferco was founded by its current chairman Bruno Bolfo in 1979. In 2013, Tangshan Iron and Steel, the largest of the mills that form Hebei Iron and Steel, bought a 10 per cent stake in Duferco for $78m.

“It makes sense if the Chinese are looking to increase exports and Chinese mills are looking for opportunities to export,” said John Kovacs, a steel analyst at CRU.

                                                                                                                                                XINSTEEL   INFORMATION