Sinosteel admits to financial difficulties amid economic slowdown
Sinosteel, a state-owned mainland mining company and steel trader, said it is facing financial difficulties as the economy slows and some customers are not paying on time.
Sinosteel, a state-owned mainland mining company and steel trader, said it is facing financial difficulties as the economy slows and some customers are not paying on time.
The company was taking measures to improve earnings and maintain cash flow, said a Sinosteel official, who asked not to be identified.
Steel traders are having trouble repaying loans as steel prices have tumbled 27 per cent on the mainland this year amid industry overcapacity and slowing demand from home builders. A court in Shanghai received 1,051 disputes worth a combined 11.4 billion yuan regarding lending to steel traders in the first quarter of this year, the reported in April.
The state-owned Assets Supervision and Administration Commission removed Sinosteel president Huang Tianwen from his post in May 2011, without giving a reason, after the company was accused of inflating sales at its units by the National Audit Office. China Minmetals Corp rejected a merger with Sinosteel because its assets were "excessively poor", the reported in January last year, citing an anonymous source.
Sinosteel, which bought Australian iron ore miner Midwest for A$1.4 billion (HK$9.6 billion) in 2008 and has a stake in Rio Tinto's Channar ore mine, posted revenue of 140 billion yuan last year, according to its website, compared with 186 billion yuan in 2010.