The rupture of the capital chain has devastated Shanghai's steel trading industry. In the first half of 2013, more than 600 financial loan disputes against steel traders were heard in courts at all levels in Shanghai alone.

After 2010, the state introduced real estate control policies, and steel prices plummeted in 2011. Most steel trading companies in Shanghai fell into huge losses and broke their capital chains. Since 2012, many companies have been jointly sued by banks, and many steel traders have gone bankrupt and run away, being the first to be eliminated in the industry chain. The steel trader was blacklisted for breaking trust with the bank. In 2013, the sales profit margin of the steel industry was only 0.65, and the steel trade industry itself was also unsustainable.

In particular, in 2012, Li Guoqing, a native of Zhouning, disappeared after being taken away by the procuratorate to assist in the investigation. It was rumored that he had defrauded 1 billion yuan in loans. Li Guoqing is the chairman of Wuxi Yizhou Group. All his companies have filed for bankruptcy and have been involved in dozens of cases.

Since then, major banks have classified steel trading companies as cautious industries and adopted a gradual exit approach to save losses. The steel trade industry is a capital-intensive industry, and bank credit restrictions have a great negative impact on its development.

It is worth mentioning that as the pioneer of the financing model of joint guarantee and mutual guarantee, movable property pledge and guarantee agency guarantee, Zhou Huarui has also been involved in more than 20 financial loan contract disputes, involving Minsheng Bank, China Everbright Financial institutions such as banks, Industrial Bank and Postal Savings Bank.

Zhou Huarui was just a microcosm because of the mutual insurance involved. According to statistics from the Zhouning Shanghai Chamber of Commerce, in 2013, 80% of Zhouning steel trading companies went bankrupt or were on the verge of bankruptcy because they could not repay bank loans. More than 700 people were wanted, more than 300 people were jailed, thousands of companies became defendants, and tens of thousands of credit cards were severely overdrafted. .