Jiangsu Delong Nickel Industry, the third-largest stainless steel producer in China, is under court consideration for bankruptcy reorganization. Founded in 2010 by Dai Guofang, Delong has a significant presence in the stainless steel market, with a capacity of 5 million metric tons in China and 2.5 million in Indonesia.
Despite generating revenue of 169.5 billion yuan ($23.4 billion) in 2022, the company has faced financial difficulties. Analysts suggest that its Chinese operations may be absorbed by state-owned enterprises, as the government seeks to maintain stability and avoid widespread corporate failures.
Currently, four firms associated with Delong are under government supervision, and operations continue normally. Industry insiders believe that bankruptcy reorganization is not uncommon in China, and past cases have shown minimal impact on production.
Delong’s troubles stem from a combination of falling ferro-nickel prices and rising material costs in its Indonesian joint venture, leading to significant annual losses. Additionally, stakes in subsidiaries worth over 4 billion yuan have been frozen by courts.
The court is set to appoint an administrator to draft a reorganization plan, with a deadline for applications having been established.