OREANDA-NEWS. July 20, 2012. Both Baosteel and Wuhan Steel are realizing potential risks against their respective colossal steel projects arising from concerns over the severe oversupply of high-end steel plates as well as the absence of clear differentiation and products division between the two bases.

Baosteel was reported to have halted the construction of its Zhanjiang Steel Project except the power plant for fear of becoming another Caofeidian Industry Zone. But a source from the company media center on July 15 dismissed the report saying the project is still in a normal course of preparatory phase.

According to the open data, this project will cost Baosteel 69.68 billion yuan in the next five years, much higher than the aggregate profits the whole industry obtained last year. 34.8 billion yuan of which will be raised through working capital, and the balance of 50 percent will be paid by bank loans.