**Abstract:** Jingtang Company's production can be described as untimely. "When it was put into operation, it just coincided with the oversupply of steel plates, and prices were constantly rising." As the flagship project of Caofeidian, Shougang Group's 10-million-ton steel project was introduced early on and received significant attention. This project is a joint venture between Shougang and Tangshan Iron and Steel Co., Ltd. (Tangshan Steel has since withdrawn all its shares).
The Shougang Jingtang Iron and Steel Co., Ltd. (hereinafter referred to as "Shougang Jingtang") was established as a joint venture between Shougang and Tangshan Steel. It was designed as a key player in the development of Caofeidian. On May 27, an official from Shougang Jingtang stated that the project is the leading initiative of Caofeidian, accounting for about a quarter of the total investment. "We really hope the situation will improve. Making a profit of five or six billion yuan annually should not be a problem," he said.
However, despite being in operation for over three years, the project has experienced consecutive losses, with high debt levels affecting future growth. Industry sources reported that the company lost more than 10 billion yuan in the past few years. According to internal data, the company had net losses of 530 million yuan in 2009, 3.137 billion yuan in 2010, and 5.141 billion yuan in 2011. The losses continued into 2012, with some reports suggesting losses exceeded 10 billion yuan in total.
Despite these challenges, some officials remain optimistic about the project's potential. They believe that the state-of-the-art facilities are gradually delivering value, with some technical indicators reaching international standards. The company also emphasized that it is focusing on high-end products such as hot-rolled strips, cold-rolled sheets, and electrical steel—materials used in automobiles, ships, pipelines, and home appliances.
Yet, the market response has been less than favorable. When Jingtang started operations, the steel plate market was strong, but by 2010, the industry had changed rapidly, and profitability declined. Industry insiders noted that the timing of the project was poor: "When it was put into production, it just caught up with the oversupply of plates, and prices were always falling."
Another challenge lies in the difficulty of selling high-end products. Although the company uses advanced equipment and high-grade imported iron ore, the products lack distinct features and face limited demand. As one analyst pointed out, "There is no special feature, limited sales channels, and the market does not recognize the products. As a result, losses continue to grow."
Additionally, Jingtang has not yet reached its full design capacity, operating mainly based on customer orders. "We have taken over and even exceeded Shougang’s Beijing capacity, but due to slow market conditions, we haven’t reached our planned output," an official explained.
High debt remains a major issue for Chinese steel companies. While exact figures for Jingtang are not public, the interest burden is considerable. "Without these expenses, our company would definitely be profitable," said one executive. The project’s high investment level, combined with high borrowing costs and operational expenditures, has made financial management particularly challenging.
In conclusion, while Shougang Jingtang represents a significant industrial shift and a symbol of regional development, its journey has been marked by financial struggles, market mismatches, and operational hurdles. Whether it can turn around and fulfill its potential remains to be seen.
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