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"The absolute volume is not the priority," said De Morgan. "DITH has been maximizing the diversity and quality range of the Chinese steel company's products exported to foreign markets, which is the biggest added value we bring to this business."

Liu Jian, head of the international cooperation department of HBIS, said the alliance will help the company avoid increasing trade disputes in the steel sector based on the rich experience of DITH.

Bruno Bolfo, chairman and founder of DITH, said the deal will provide Duferco stable steel supplies and opportunities to grow its business in China and the rest of Asia.

China's steel industry has been suffering from overcapacityin recent years and many large-scale producers are trying to explore overseas markets and develop non-steel businesses to survive the market.

However, the Chinese government has never encouraged steel exports.

Zhang Changfu, vice-chairman of the China Iron and Steel Association, said as a high energy-consuming industry, the major target for the nation's steel sector is to cater to domestic needs.

China exported 65.34 million tons of steel products during the first nine months of this year, up 39 percent year-on-year, according to customs data.