China’s largest private steel maker has failed to repay a 3 billion yuan ($3.75 billion) debt, which means yet another high-profile company in China will likely face bankruptcy as Beijing begins to wean its private businesses off of government bailouts.
According to the 21st Century Business Herald, “Highsee Group’s 3 billion yuan debt was overdue last week. The company is running in red, and has failed to pay workers for months. Many of its furnaces have stopped operating.”
Highsee Iron and Steel Group Co., Ltd., the largest private steel manufacturer in China based in Shanxi, is just one of numerous steel mills facing issues in the country as demand has not kept up with massive 2013 production.
Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India fluctuated in a ten-point range. The price of Chinese HRC was essentially unchanged. The price of Chinese coking coal saw essentially no change for the fifth day in a row, either.
Steel billet prices were still strong on the LME, despite the news out of China. With a 2.6 percent increase over the past day, the steel billet cash price was the biggest mover on the LME, closing at $395.00 per metric ton on Wednesday, March 19. The steel billet 3-month price held steady on the LME at $400.00 per metric ton.
After falling for two days, the 3-month price of the US HRC futures contract rose 0.3 percent. Closing out a three-day flat streak, the spot price of the US HRC futures contract moved up 0.3 percent t.