SDVKY Sandvik AB (PK)

STOCKHOLM--Swedish engineering group Sandvik AB (SAND.SK) Tuesday said its negotiating the start of a joint venture with Zhuzhou Cemented Carbide Group Co. Ltd. to sell and market the Chinese company's products outside China.

Zhuzhou is China's largest domestic maker of cemented carbide and offers smelting services for materials like tungsten and cobalt.

The ambition of the joint venture is to capture market share in the fast-growing mid-market segment for metal-cutting tools, and strengthen Sandvik's position in China, the Swedish company said. It added that the parties haven't yet entered any binding obligations to enter a definitive agreement.

Sandvik shares traded 0.3% lower at SEK92.15 in Stockholm noon trading.

Write to Sven Grundberg at sven.grundberg@wsj.com; Twitter: @svengrundberg

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