Beware of fraudulent companies among steel and metal material suppliers in China
We recently learned of an agency claim case involving an importer, a Brazilian company, which reported that it purchased approximately 125 tonnes of steel coils in two batches from a certain steel company in Shandong in April and May 2025.
Based on relevant business records, we found that the transaction price was significantly lower than the market price by approximately 20% to 30%. Jinan Steel Co., Ltd. only delivered approximately 50 tonnes as required and then ceased responding to the overseas client’s requests for shipment, failing to arrange further deliveries. The company’s owner later claimed that the salesperson had resigned and refused to respond to the buyer’s claims, citing reasons such as ‘I don’t know’ or ‘I’m not sure,’ eventually even refusing to answer phone calls.
Based on numerous cases we have handled as agents, we have identified the following details: The Shandong Steel Company is headquartered in Jinan, with the owner hailing from Liaocheng (commuting between Jinan and Liaocheng every weekend). The company is a family-run business, with the management team consisting of a father and son surnamed Li. Through relevant channels, we found that the company also has affiliated entities in Liaocheng, and even the telephone number listed in the company’s credit report includes a landline in Shijiazhuang, Hebei Province. In Hebei’s Xingtai and Handan regions, as well as the adjacent Liaocheng area in Shandong, there are many similar cases, with nearly identical modus operandi: securing export contracts at low prices, demanding high advance payments or even full payment upfront, then refusing to ship goods or only shipping a small portion after receiving payment, and in some cases, completely ceasing communication, thereby achieving over 60% ‘profit.’
Liaocheng City is a major hub for steel and metal material processing in Shandong Province (northern China). Based on recent cases we have handled, we have found that fraudulent cases involving international trade are prevalent in the surrounding areas of Liaocheng City, with the involved goods primarily being steel and metal materials.
The registered locations of fraudulent companies are not limited to Shandong, Liaocheng, and Jinan. They may also be located in Qingdao, Tianjin, Wuxi, or even Shanghai. We must remain vigilant!
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