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Firs the latest on Haixin:
China’s Haixin Steel comes to standstill after final furnace stoppage
"It is not viable to continue producing when we are making a loss of 200-300 yuan [$32-49] per tonne," a source close to the privately-owned mill told Steel First on Thursday March 20.Real estate!
The mill, which is based in central China's Shanxi province stopped operation of its five other furnaces last week after defaulting on loans.
However, Haixin is not bankrupt, the source stressed, and is still seeking local government support.
"Haixin expects to be granted sufficient loans by the end of the month," the source said.
The source did not rule out the possibility of Haixin restarting its furnaces once its credit problems are solved.
However, the source noted that the company is now more interested in investing in other, non-steelmaking industries such as real estate and education.
This is a good time to revisit a photo I posted here back in November:
The headline is "life or death" for Chinese steel companies. On the left hand side is a comparison of Hebei province's (the one that surrounds Beijing) steel production versus Japan, USA and Russia, with Hebei producing 1.5 times as much as Japan, 1.85 times as much as the entire U.S.A., and 2.3 times as much as Russia. On the right (it's hard to see) is a comparison of profit margins on a ton of steel. Several years ago it was an iPhone, then it was meat, and now it is a popsicle.The government wants to shut steel mills for good reason, with one province alone producing as much steel as the United States. That leaves a lot of steel mills to close, and if they have high debt ratios, it will lead to an expensive bill for local governments. If property markets soften, and local governments get the bulk of their revenue from land sales, and they are also unable to borrow as much due to high debt levels and central government policy, how will they bail out the mills?
On to Waterloo: 海鑫钢铁30亿债务缠身：富二代的滑铁卢
Following the 70 million married women bankruptcy collapse Libin coal bosses, the largest private steel enterprises in Shanxi - Haixin Iron and Steel Group has also a crisis.
Local steel industry sources told 21st Century Network, Haixin Iron and Steel last week overdue loans phenomenon, present serious losses, and more blast furnaces have been shut down, workers' wages are owed several months.
According to the 21st Century Network is understood that the scale Haixin Steel mills in the country, although only ranked in the middle, but the visibility of their boss was rude industry heavyweights.
2003 Haixin Steel founder Li Haicang was shot dead, when he was only 22 years old, Andy Lee will take over the position to become wealthy Marshal.
However, he did not seem his father's steel business showed particular interest. 10 years Haixin the declining steel business, but outside the ring of steel, Li Zhaohui but "play" fast, becoming the youngest richest man in Shanxi.
Stake in Minsheng Bank, Minsheng Life Insurance, Yinhua Fund, Industrial Securities, Shanxi Securities to expand financial landscape; buying China Aluminum, Yimin Commercial, Industrial Bank, Luneng number of listed shares, making a run; married actor 2 years after the divorce car Xiao, Li paid a 300 million consideration of marriage.
Succession decade Haixin Iron and Steel is already a dead end?
Haixin Steel: Steel decade old emergency
March 7, a "a steel plant in Shanxi discontinued due to funding strand breaks, Jiangsu mills verbal notification received from the bank, said the credit will be reduced by 20%" message circulated in the circle.
Day, iron ore, coal, coke futures three varieties of ferrous metals industry chain opt limit, according to several industry analysts, "Shanxi certain steel" refers Haixin Iron and Steel.
According to public information, Haixin Iron and Steel is located in Yuncheng, Shanxi Wenxi, founded in 1987, is an iron and steel industry, the set of resources, finance, real estate, education and other children's line (production) industry is one of the large enterprise groups . With 5.6 million tons of iron, steel production capacity of 6 million tons, 2.6 million tons of building materials, 2.6 million tons of slab, 2.2 million tons of hot rolled coil, is the largest private enterprises in Shanxi Province.
"Hai Xin stopped most of the production line, is now no takeout, but also the production of goods previously owed." Above the steel industry sources told the 21st Century Network.
Many Haixin agreement households income does not arrive due to produce a panic, and even appeared on the market Haixin collapse, bankruptcy rumors, the media then reported that Haixin Iron and Steel failed to repay overdue bank loans last week.
"Loan size of about 3 billion or so late, but the exact number is not clear." Above the steel industry source said.
21st Century Network on the above call Haixin Iron and Steel, one office staff said these cases are not clear, then they are linked to the 21st Century Network Haixin Iron and Steel General Manager's Office, a staff member said, "all the company's current production normally, several blast furnaces are running outside people say that we have no alternative. "
According to Steel House news Haixin Iron and Steel on January 6 on 1380m3 blast furnace maintenance, planned to resume normal production in mid-March, is expected to affect the molten iron is about 0.4 tons / day; currently 3 630m3 blast furnace is off the wind, impact of molten iron is about 0.57 tons / day, the end time is uncertain.
Haixin Iron and Steel has encountered some trouble.
China's steel industry is currently facing multiple crises, overcapacity, high debt, weak demand, most of the steel prices are at a loss. Vice Chairman of China Iron and Steel Association, said Liu Zhenjiang more recently, in the first quarter of this year may be the steel industry since the benefits of the new century the worst quarter, steel companies began to truly enter now or in the winter.
The deep inland Shanxi Haixin Iron and Steel is the case of the private steel worse.
"Compared to the coastal iron and steel enterprises, iron ore shipped products shipped out come, logistics costs are much higher." One analyst told the United Steel net in the 21st century. According to its analysis, Haixin Iron and Steel also has at least several hundred million loss last year.
The problem has already caused Haixin various warning signals.
Yuncheng Branch Banking in December of last year, a "For Yuncheng steel industry survey of bank credit risk situation," pointed out: To strengthen the linkage between the various sectors of banking institutions, especially Haixin Iron and Steel Group Co., Ltd. as a huge amount of such loans In a number of lending institutions are leading enterprises, enterprise information exchanges should be, aware of the loan amount, to prevent excess credit, difficult to monitor the amount of funds and other issues.
As the largest local private enterprises, Haixin revenue accounted for more than 60% annual contribution Wenxi, but the relationship with the government Haixin are increasingly alienated.
Steel prices Marshal LiZhaoHui: love does not love Industrial Investment
Li Haicang different with his father, Li Zhaohui few returnees and the government to deal with.
"We had wanted to visit Magistrate Li Zhaohui, finally did not make the trip. LiZhaoHui times since taking over Haixin annually since only a handful of appearances." Wenxi Committee Propaganda Department official told the media said so.
It is reported that Li Zhaohui perennial stay in Shanghai, Beijing and rarely stay wenxi, he has exclusive private aircraft, each to Wenxi will Yuncheng plane landed at the airport, and therefore difficult for outsiders to know his whereabouts.
In addition to the relationship between government and business indifferent Haixin Iron and Steel relationships with local businesses also deteriorated.
21st Century Network survey found that by 2005, three-dimensional and Shanxi Haixin, Shanxi Guanlu number of listed companies are closely related, signed a mutual agreement to provide financing guarantees for each other, but in 2005, after almost no This cooperation.
Andy Lee will operate mainly in the capital markets as a platform Shanxi Haixin Industry. Andy Lee will hold wenxi Hui Tian Industrial Co., Ltd. 90% stake, wenxi Hui Tian holds 89.3% stake in Industrial Haixin Iron and Steel Group, Haixin Iron and Steel Group holds a 90.93% stake in Shanxi Haixin Industry. Through this chain, Andy Lee will be in the hands of the family assets.
Andy Lee will be in the capital market, the most admirable, was in November 2004, Haixin's Shanxi Haixin Industrial Co., Ltd. at a price of 590 million yuan, the color of shares held by the transferee 160,000,000 shares of Minsheng Bank, Minsheng Bank to become The tenth largest shareholder.
2007 Hurun chart, Li Zhaohui Minsheng Bank net worth due to holdings surged to 8.5 billion yuan, ranked 78, compared with a net worth soared 112% in 2006, and became the youngest Shanxi's richest man.
However, according to a Haixin insiders, this is not a major investment from credit Li Zhaohui, while his father Li Haicang.
This is Li Zhaohui by far the most successful investment, Haixin Industrial bull market highs in the first half of 2007, selling in the hands of nearly 100 million shares of Minsheng Bank, cash in more than 1 billion yuan.
Li Haicang lifetime as vice chairman of the National Federation, and Minsheng Bank initial "background" is the Federation, Li Haicang served as director of Minsheng Bank. The important thing now a Haixin assets - Minsheng Life Insurance, Industry and Commerce also has the "background."
It is reported that Minsheng Life Insurance is one of the seven straight national insurance companies CIRC in 2002 founded by the National Federation of the lead, then the top three shareholders are universal Finance Limited, China Oceanwide Holdings Group Co., Ltd. and the sea Xin Steel.
After several changes in equity, Haixin Iron and Steel still holds 13.15% stake in Minsheng Life Insurance, ranked the fourth largest shareholder.
November 2004, Li Zhaohui's Haibo Xin Hui, obtained from the hands of Arima Technology Heilongjiang Fuhua Group (later renamed Universal Denon) 21.5% stake, making it the second largest shareholder in the company.
After a year and a half, Haibo Xin Hui clearing the entire 3293.75 million shares, more than 700 million profit.
2007 LiZhaoHui the three big listed companies intend to buy, August to bid 215 million yuan in Shanxi Securities acquired 3.84% stake; October to participate in Societe Generale Securities to increase their investment to 103 million yuan to subscribe for the 6871 shares; November and to 1.18 billion yuan at high prices auction Yinhua Fund purchased 21% equity interest.
In addition to the Minsheng Life Insurance, equity Li Zhaohui has purchased all sold, but the benefits far below the Minsheng Bank.
Equity Yinhua Fund, for example, in 2012 this part of Southwest Securities acquired shares at a price of 1.18 billion yuan, five years, Li Zhaohui has not been profitable.
Subsequently, Li Zhaohui has worked in the capital markets to buy China Aluminum, Yimin Commercial, Industrial Bank, Luneng Taishan and many other listed stocks, Kuaijinkuaichu, it is not particularly rosy results.
Haixin Steel boom-bust: or integration
Although Andy Lee will play in the capital markets fast, but did not get Haixin Iron and Steel leaps and bounds.
"Hai Xin Sha Steel would have wanted to be, Chinese private steel mills sit first chair", talking about Haixin Iron and Steel, Shanxi steel circles had so lamented.
Joint metal in 2011 for a private steel companies nationwide survey shows that in Li Haicang times Haixin Steel total assets of 4.036 billion yuan, net profit of 413 million yuan, ranking the forefront of the domestic private steel enterprises; 2004 Haixin Steel has also to pay taxes 227,560,000 yuan ranked Chinese private enterprise tax hundred table top; 2005 sales revenue of 7.014 billion yuan, net profit of 213 million yuan.
After Haixin Iron worse.
Since 2006, many times Haixin Steel Ministry of Environmental Protection, Shanxi Environmental Protection Department and other departments informed criticism or supervision violations rectification project. After the financial crisis in 2008, the steel industry has been affected, Haixin Iron and Steel discontinued for half a year.
A surprising is very active in the capital markets of LiZhaoHui Haixin Iron and Steel failed to be able to operate the market.
Since Li Zhaohui low-key, little is known about the company in the industry. A Haixin three quarters of 2009 steel production and operation of the 21st century network obtained from the website of the Ministry of Commerce show that during the reporting period Haixin Iron and Steel cumulative production of iron 1,963,500 tons, down 24.30%; production of 1,799,100 tons of steel, an reduction of 26.22%; production of steel 1,528,700 tons, an increase of 8.43 percent.
Haixin Iron and Steel same period total industrial output value of 5.948 billion yuan, down 40.03%; industrial added value of 943 million yuan, down 61.58 percent; sales revenue 5.723 billion yuan, down 41.72%.
And the same is private steel tycoon Du Shuanghua, Rizhao Steel was founded in 2003 to create a 4.5 billion net profit in 2010.
"Hai Xin actually only 3 million tons of annual production in the domestic mills have not break into the top 30." An analyst in the 21st Century Network United Steel said.
As the industry downturn, coupled with the restructuring of the national steel background, beginning in 2009, Shanxi, Taiyuan and Beijing Shougang began to negotiate the acquisition of Haixin Iron and Steel, but has been unable to make the trip.
"Now Haixin capital chain is a problem, but also estimates the restructuring, and now the local government has to intervene." Above the steel industry source said.
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