On July 24th, Xiangshui County Guanjiang New City Construction and Development Co., Ltd. applied to the Xiangshui County Peoples Court for bankruptcy of Jiangsu Delong Nickel Industry Co., Ltd.

Dai Guofang, the founder of Delong Nickel Industry, was once an expert in scrap metal. With the prosperity and development of the Chinese economy, he accumulated and rebuilt a wealth.
Now, as the economy cools down, Dai Guofang is facing a debt crisis that threatens the future of one of the worlds top stainless steel producers - Jiangsu Delong Nickel Industry Co., Ltd., which will also chain endanger the factories owned by his wife and son.
Its demise will trigger a chain reaction in Chinas vast manufacturing industry and the besieged global nickel market.
According to informed sources, the local government has taken over most of Delongs factories to recover outstanding funds and protect employees.

Distribution map of nickel metal smelting enterprises in Indonesia

An insider revealed to Xiao Liao that the remaining factories are currently operating normally. As this matter has not yet been made public, these anonymous sources said that this large commodity trader recently cut off its ties with China.
According to the court notice, Dai Guofang and his family are currently involved in multiple legal disputes with contractors and suppliers.
According to Tianyancha, since April this year, judicial rulings have frozen shares worth approximately 3 billion yuan (about 410 million US dollars) in Delongs subsidiaries.
Bloombergs phone call to Delong China headquarters went unanswered, and its Indonesian subsidiary did not respond to emails seeking comment. The messages and interview requests sent to his family have not been responded to.

Delong Nickels factory in Indonesia

Delong Nickel has extended from the industrial center of China all the way to Indonesia, making it one of the most famous private steel producers in China and a strong competitor to Xiang Guangda, a nickel giant under Qingshan Holdings Group. Two years ago, Xiang Guangdas huge short position almost bankrupted the London Metal Exchange.
In 1963, Dai Guofang was born in a rural area of Jiangsu Province in eastern China, and his career began on the streets. His first job in his teens was searching for and selling scrap metal, a job that continued until he could afford to buy second-hand ironmaking equipment.
Having only received primary education, he self-taught steelmaking through reading and consulting, and gradually expanded his business. By the year 2000, his company could produce 1 million tons of steel annually, and he had always wanted to produce more.
The local government of Jiangsu initially supported his plan for a 10 million ton large-scale steel joint venture. To avoid scrutiny, the project was assigned to several different factories. Dai, who was ultimately accused of tax evasion, was detained by the government and sentenced to five years in prison in 2009 before being released.

The Tieben Incident is Dai Guofangs "first chapter"
Then he began the second chapter of his life. At the beginning of Chinas economic prosperity, Dai Guofang discovered a new mission: to manufacture more complex, economical, and cost-effective nickel and stainless steel - which was also the bet made by Qing Shan Xiang Guangda.
Prior to the continuous troubles in recent years, Delong had a stainless steel production capacity of 6 million tons in China and an additional 3 million tons from its joint venture in Indonesia, making it a global stainless steel supplier second only to Qingshan.
But the nickel and stainless steel markets have been disrupted by the rapid expansion of Indonesian production. According to publicly available data from third-party platforms, the price of nickel pig iron has fallen by over 40% since early 2022 due to oversupply. The weak global demand has also lowered the price of stainless steel, especially the nickel rich stainless steel favored by Delong, which has a lower price.
The conflict at its Indonesian factory does not help boost the confidence of Delong investors, creditors, and business partners - license delays have also limited the supply of nickel ore, increased costs, but product prices remain low.
Other nickel companies, such as Mr. Xiang from Qingshan, have already entered the stage of refining and high-grade nickel batteries in pursuit of higher profits. However, Dai Guofang fell behind.

Dai Guofang inspects the North Morowali Base

According to sources, Dai Guofang is currently negotiating with local governments on restructuring issues due to limited financing channels.
In Indonesia, Delong Nickel has been trying to reduce its holdings to raise cash for many years.
Last July, the company sold a majority stake in an Indonesian project to CNGR Advanced Material Co., Ltd., a Chinese precursor manufacturer and supplier to Tesla.
Recently, the company was required to repay the debt of a Chinese sister company, China First Heavy Industry Group Co., Ltd., at a factory in Indonesia. China First Heavy Industries is a state-owned equipment manufacturer and a partner for the companys expansion in Southeast Asia.
In 2004, Delong Nickel Industry, in cooperation with local officials and banks, illegally requisitioned land and other means to launch the 10 billion yuan and 8 million ton Tieben Steel Project, which was announced to be suspended by the Jiangsu Provincial Peoples Government.
For Chinas billionaire class, a comeback is unusual. Dai Guofang has long been a person who has recovered from shame, and traders and steel entrepreneurs who have done business with him have described the 61 year old as very resilient.
But in recent weeks, they have stated in interviews that the huge losses, drastic changes in the nickel market over the past two years, and plummeting prices have made him consider the possibility of giving up control.
In his sixties, Dai Guofang once again stood at a crossroads in life. We do not know if he had the last chance to turn the tide.