In a decline emblematic of the extra overextended corners of Chinese language trade, native authorities have already taken over most of Delong’s vegetation to claw again cash owed and to guard workers, in keeping with individuals accustomed to the matter. The remaining factories are barely working. Main commodity merchants severed hyperlinks a while in the past, stated the individuals, who declined to be named as the difficulty shouldn’t be public.
In keeping with court docket notices, Dai and his household are at the moment embroiled in a number of authorized disputes with contractors and suppliers over funds. Since April, judicial rulings have frozen stakes in Delong subsidiaries value a complete of roughly three billion yuan (greater than $410 million), in keeping with information supplier Tianyancha.
Comebacks are uncommon for China’s billionaire class and Dai has lengthy stood out as a person who recovered from shame. Merchants and metal entrepreneurs who’ve performed enterprise with him describe the 61-year-old as tenacious, and a survivor. However hefty losses, dramatic adjustments within the nickel market over the previous two years and tumbling costs have left him considering the prospect of relinquishing management, they stated in interviews over current weeks.
Phone calls to Delong’s headquarters in China weren’t picked up and its Indonesian unit didn’t reply to emails searching for remark. Messages and interview requests despatched to the household went unanswered.
Delong stretches from China’s industrial heartland to Indonesia, making Dai one of many nation’s most distinguished non-public metal producers and a bitter rival of Tsingshan Holding Group Co.’s Xiang Guangda, the nickel magnate whose huge quick place virtually broke the London Metallic Change two years in the past.
Born in 1963 in a village within the japanese Chinese language province of Jiangsu, Dai began his profession on the road. His first job as a youngster was discovering and promoting scrap metallic, till he was lastly capable of purchase second-hand iron-making tools.
With solely a primary-school schooling, he taught himself steelmaking by studying and quizzing engineers, and he steadily expanded his personal operations. By 2000, he was making 1,000,000 tons of metal a 12 months and wished extra. Jiangsu bureaucrats initially backed his plan for an enormous 10-million-ton metal complicated, however later break up the mission into a number of totally different vegetation, hoping to keep away from central authorities scrutiny.
The plan got here undone when Chinese language former Premier Wen Jiabao launched a 2004 marketing campaign towards rogue investments. Jiangsu was ordered to punish these accountable and Dai, finally accused of tax evasion, was left to languish in detention. He acquired a five-year sentence in 2009 and was instantly launched.
Second act
Then got here his second act. Simply because the Chinese language increase started in earnest, Dai discovered a brand new calling: making a budget nickel and stainless-steel a extra subtle financial system required. It was the identical guess made by Tsingshan’s pioneering Xiang.
Earlier than its current troubles, Delong had 6 million tons of stainless-steel capability in China, and an additional 3 million tons from its Indonesian joint ventures, making it the world’s largest provider after Tsingshan.
However nickel and stainless-steel markets have been upended by the fast growth of Indonesian manufacturing. Nickel pig iron costs have fallen greater than 40% since early 2022 because of extra provide, in keeping with information from SMM Info & Expertise. Softer international demand has additionally dragged down stainless costs, particularly for the actual nickel-rich kind favored by Delong.
Violent protests and lethal clashes at its Indonesian vegetation haven’t helped bolster confidence amongst Delong’s buyers, collectors and enterprise companions — nor have allowing delays which have restricted provides of nickel ore and ratcheted up prices, at the same time as product costs languished.
Others, like Tsingshan’s Xiang, have moved into refining and higher-grade nickel for batteries to chase increased margins. Dai, although, fell behind.
With restricted financing choices, Dai is now in talks with Jiangsu native authorities officers to salvage operations there.
In Indonesia, the corporate has been attempting for a number of years to promote down its stakes to lift money. Final July, the corporate offered a majority holding in one in all its Indonesia tasks to CNGR Superior Materials Co., a Chinese language precursor maker and provider to Tesla Inc.
Extra lately, one in all its Indonesian vegetation has been referred to as in to pay money owed {that a} Chinese language sister operation owes to China First Heavy Industries Group Co., a state-owned tools producer and a accomplice behind its Southeast Asian growth.
(By Alfred Cang and Annie Lee)