China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, has signed new cooperation pacts with Sinosteel Corp (中國中鋼), China’s second-biggest iron-ore trading company, to strengthen its capabilities in procurement, trading and resource development.
CSC, based in Siaogang District (小港), Greater Kaohsiung, said in an e-mailed statement yesterday that chairman Tsou Juo-chi (鄒若齊) had signed a “strategic cooperation agreement” with Sinosteel chairman Jia Baojun (賈寶軍) on Friday last week in Beijing.
The Taiwanese firm said in the statement that it hoped the deal would further broaden cooperation with the Chinese firm in areas such as production, trading, engineering and business management.
The two companies also hoped to increase exchanges on the development of new energy, materials and mining resources, the statement said.
Also on Friday, CSC vice president Liu Jih-gang (劉季剛) signed an annual cooperation agreement with his Sinosteel counterpart -Jiang Hong (蔣宏) in Beijing.
Under the agreement, CSC will purchase steel manufacturing related raw materials, indirect materials, refractories, rollers and manufacturing equipment from Sinosteel subsidiaries, while Sinosteel will purchase steel-related products from CSC.
In addition, the two companies hoped the annual trade pact would pave the way for more business collaboration in re-export activities and other trade facilitation programs, according to the statement.
Analysts said the new deals with Sinosteel would likely help CSC expand into overseas markets, as the company continues to see its domestic shipments drop. Last month, domestic shipments dropped to 514,892 tonnes, or 67.47 percent of the total, from 547,462 tonnes, or 70.08 percent, in June, and 563,329 tonnes, or 71.94 percent, in May.
“China Steel probably wants to expand into the China -market through Sinosteel,” Polaris -Securities Co (寶來證券) analyst Peter Tzeng (曾耀德) told Bloomberg Newswire yesterday. “The Taiwan market is saturated, so the company must develop overseas markets.”
CSC and Sinosteel first signed a strategic cooperation agreement in 2006 and further developed their business partnership by inking an annual cooperation agreement in 2009, CSC said on its Web site.
Sinosteel has more than 80 subsidiaries, mainly engaging in the developing and processing of metallurgical mineral resources. It also trades in and operates logistics operations for metallurgical raw materials and products, as well as engaging in related engineering technical services and equipment manufacturing, according to CSC.