In the once bustling factory of Shenyang Dongfang Steel, the equipment that had been running at full capacity has stopped operating, leaving only a few people behind. Creditors are hauling away the remaining steel and equipment from the steel mill, while workers helplessly watch the factory being emptied day by day. The steel mill is in debt, the boss has "disappeared," banks are chasing debts, and workers are demanding unpaid wages... like a dangerous domino effect, falling one after another.

　　It is hard to imagine that a private steel plant that had survived for 20 years would come to an end in this way. Yet this is a true microcosm of the collapse of private steel enterprises.

　　Data shows that in the first half of the year, a total of 88 private steel mills in China achieved a profit of 1.243 billion yuan. Among these steel mills, 42 suffered losses, with a total loss of 6.32 billion yuan. The proportion of loss-making mills rose from 30% last year to 47.7%. In the same period last year, the average profit per ton of steel for these mills was 33 yuan, but this year it has dropped to 8.7 yuan. This situation indeed makes private steel enterprises pessimistic. News of capital chain ruptures at steel mills has come in waves this year, and a batch of mills in Tangshan, a major steel town, has already collapsed.

　　The wave of bankruptcies among private steel enterprises this year did not come without warning. Last year, banks restricted lending, which directly led to a large number of steel trading companies exiting and going bankrupt, bringing about the first wave of bankruptcies in the steel industry. The saying "prevent fire, prevent theft, prevent steel trade" was once widely circulated. This year, the wave of bankruptcies has spread to production enterprises, and the disadvantages of private steel enterprises have become apparent. With low efficiency and low-benefit operations, cash is continuously draining away. Over-reliance on loans means that once banks withdraw credit, the capital chain quickly breaks.

　　In conversations with people in the industry, they generally believe that against the backdrop of eliminating outdated production capacity and the contraction of the steel industry, the reshuffling of small and medium-sized steel enterprises will accelerate. It can be said that after the great wave of elimination, more private steel enterprises collapsing is an inevitability and a trend. However, how to minimize the negative impact is a difficult problem.

　　The China Iron and Steel Association calls for the establishment of a reasonable exit mechanism and supporting measures, but these have been long awaited and still not forthcoming.

　　As early as 2007, some provinces began to gradually establish exit mechanisms for outdated production capacity, with governments setting up compensation funds to support the closure, suspension, merger, and transformation of eliminated enterprises. However, for private steel enterprises that are forced to close due to poor management, inability to withstand the market cold wave, and heavy debts, how they and their employees should exit is currently a largely blank area.

　　After visiting several bankrupt private steel enterprises on site, the employees of these enterprises can only sigh in the face of the declining factories; they are powerless to turn things around. What angers them even more is that when the crisis hit, the bosses either absconded with the funds or disappeared. The interests of employees are harmed, and they do not know how to get their wages and insurance (reassuring insurance). If the problem of worker resettlement is not properly resolved, it is tantamount to planting a series of hidden dangers.

　　A veteran employee of a private steel enterprise once said, almost in tears: "Most of us have worked in the steel mill for over ten years. We have watched the workforce shrink from one or two thousand to just two or three hundred now. The factory is failing and is about to become an empty shell, and no one is coming to deal with this mess. The boss disappeared long ago, and the government departments haven't done much either. We really don't know what to do."

　　His panic and helplessness also reflect that when employees of private steel enterprises encounter difficulties at the steel mill and cannot seek the "boss" to solve them, they place their hopes on the government to rescue the market. Some voices also believe that small and medium-sized private steel mills should not pin their hopes on government rescue. They should abandon illusions, recognize the situation clearly, and promptly choose competitive steel products, or cash out and exit the steel industry in a timely manner—this is also a correct decision.