Delong Puts Workers on Leave and Shuts Some China Furnaces

Singapore-listed steel firm Delong Holdings said on Wednesday it had put a few hundred workers on leave and shut several furnaces in China's northern Hebei province, because of weak demand. "The workers have been put on extended leave," said a spokesman for China-based Delong, a maker of steel coils.

Domestic Chinese steel prices have plunged from their summer peak, cutting demand for raw material iron ore and leading analysts to say most steel makers are losing money.

Global crude steel production sank 3.2% in September, and the world's biggest steelmaking country China suffered a sharp 9.1% decline in output, the World Steel Association said on Wednesday.

Earlier this month smaller steelmaker FerroChina said it was unable to repay 706 million yuan ($104m) in working capital loans and had suspended operations at its manufacturing plant in China.

The global economic crisis has worsened the outlook for manufacturers in China, with several Hong-Kong linked firms closing factories and laying off staff in China.

The government in China's manufacturing heartland of Guangdong may set up a fund to help workers laid off amid the global economic turmoil, state media said on Monday.

Russia's largest steel maker Evraz owns 10% of Delong and has options to take a 51% stake, subject to Beijing's approval.

Reporting by Melanie Lee; writing by Neil Chatterjee, Reuters.