India's biggest steelmaker Tata Steel is in talks to sell its assets under NatSteel in Singapore, Thailand and Vietnam to China's number two steel producer, HeSteel Group, reported S&P Global Platts citing industry sources familiar with the matter.

The assets under discussion include its Singapore unit, which operates the city state's sole electric arc furnace, integrated with downstream long steel re-rolling mills, and NatSteelVina, a 200,000 mt a year rebar and wire rod mill in Hanoi, Vietnam, one of the sources said.

It may also sell its Thai operations, he added.

NatSteel in Thailand owns Siam Industrial Wire, which operates a 200,000 mt/year pre-stressed concrete steel strand and wire plant, and TSN Wires, a zinc-aluminum coated products joint venture with Nichia Steel Works.

"The companies are in discussion," NatSteel President and CEO Ashish Anupam, told S&P Global Platts by telephone. "The companies are in discussion for various other things." He declined to comment beyond that.

A Mumbai-based spokesman for Tata Steel declined to comment Tuesday beyond saying "it is not confirmed as yet."

HeSteel’s overseas business department couldn't be reached for comment. A company source said the information was true, but added it wasn't clear if an agreement had been signed by both sides.

NatSteel's other assets include Easteel Services, a 40,000 MT/year fabrication plant in Johor, Malaysia, according to its website. NatSteel earlier sold its stake in a Hong Kong rebar processing joint venture to partner Hong Kong Shanghai Alliance Holdings.

Tata Steel had acquired NatSteel in 2005, but has been more focused on consolidating its position in the Indian domestic market, seen by some to have a higher growth potential than other markets.

It has signed an agreement to combine its European operations with those of Germany's ThyssenKrupp, and more recently bought compatriots Bhushan Steel and Usha Martin. Tata Steel is also bidding for Bhushan Power & Steel Ltd., a move pending approval by the Indian judiciary, said the report.

A Singapore-based long steel trader said he saw a more challenging trading landscape for Singapore going forward if HeSteel bought NatSteel's assets.

He pointed to recent acquisitions in the Singapore rebar fabrication scene -- that of BRC Asia by Esteel Enterprise, a company owned by the heads of ferrous trading firms Prosperity Steel United and Toptip Holding, and BRC's subsequent acquisition of Lee Metal Group -- which has meant the consolidation of two fabricators under the owner of one of the world's largest iron ore traders by volume.

HeSteel, itself the world's fourth-biggest steelmaking group, has also expanded its overseas footprint steadily over the past few years, with acquisitions including Swiss trader Duferco, South African iron ore miner Palabora Mining Co, and steelmaking assets in Serbia.