Workers direct a crane lifting newly-made steel bars at a factory of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province, China, October 13, 2015. Photo: Reuters/China Daily

Ten steel giants, including Sinosteel, Wuhan Iron and Steel Corporation, Masteel and Hesteel have signed debt-to-equity framework agreements totalling 150 billion yuan (US$22.93 billion), the China Securities Journal reported.

“The amount of debt which has been transformed to equities, accounts for only 4.2% of the total debt of major steel companies in China,” said an industry insider.

“Compared to other light industries, the debt ratio of steel companies is relatively high. It is difficult for state-owned steel giants to deleverage, because they need to avoid loss of assets as well as take into account the worker placement and local economy,” the insider added.

According to the Wind terminal, 34 publicly listed steel companies have seen an average of 58% growth in their main business income for the first half of 2017, with an average 406% rise in net profits.