Tangshan Iron and Steel Group Co Ltd is leading the effort to go abroad as the country's steel and iron industry struggles with overcapacity, reports Du Juan from Tangshan, Hebei province.

Against the background of the overcapacity problem in China's steel industry, Deutsche Bank AG said that it has, together with Duferco SA, an international steel dealer, arranged an USD 800 million structured prepayment term loan facility for Tangsteel in Tangshan, an industrial city in northeastern Hebei province.

It is the largest structured commodity trade financing facility ever completed for a Chinese company.

Mr Frank Wu regional head of structured commodity trade finance Asia Pacific, for global transaction banking at Deutsche Bank said that "Like Tangsteel, there are many strong and active players in the steel industry in China that continue to contribute to its economic growth. This round of financing is meant to support Tangsteel's export of high-end cold rolled steel products.”

He said increasing exports of steel products from such Chinese companies can help utilize the capacity in the domestic market.

Behind this comprehensive and supportive cooperation among the international bank, steel trader and the Chinese steelmaker is a "smart model" for making full use of the advantages of each party to survive the market, said Zhang Tieshan, a senior analyst from steel information provider Mysteel.com. He said that "There are various ways for Chinese steel companies to go abroad in addition to just selling products.”