China to restructure steel industry

The industrial restructuring concerns nine industries and over 900 listed companies with market value of nearly 670 billion US dollars. The figures indicate the extent of overproduction the drastic measures needed. Industry leader Bao Steel has just demolished its recently-built production line in Shanghai.

This is a steel project of Bao Steel in Shanghai. It stopped production last September and now the workers are taking down the shaft furnace.

Four years ago, Bao Steel paid more than 2 billion US dollars for the company. And that's when the steel market began to drop.

Hu Xuefa, assistant to General Manager of Bao Steel, said, "I'm more heartbroken than anyone else. The project was built under my supervision day and night. But I also witness its shut-down."

Hu Xuefa says when production went on-line, the ship building industry was taking off worldwide.

Then came the financial storm in 2008. The figures show the project accumulated a loss of about 4 million US dollars that year from April to December.

In 2009, the loss surpassed 16 million US dollars. Bao Steel did not disclose its loss in 2010, but net profit was minus 4.7 percent. And in 2011, its net profit dropped to minus 8.9 percent.