Europol Intelligent Network Co., a company selling steel products online in China, reported its profits increased 31.5% to 218.3 million yuan ($33.21 million) in 2015 from 166.0 million yuan ($25.25 million) in 2014.

Europol attributes the rise of profits to providing more services to connect steel manufacturers, steel traders and companies that use steel in their productions. 

Initially the Fujian-based company was a logistics company and it created opsteel.cn in 2005. The website provides a marketplace of showing and selling different kinds of steel products, including stainless steel, steel pipe and steel board.

Beyond selling steel, Europol also provides many services in the steel supply chain, such as product inspection, storage, payment, shipping and market data services, according to the company.  

Europol operates its own warehouses with total storage for 2 million tons of steel and also manages several factories that can produce customized steel products from basic steel materials.

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Europol says it has about 100,000 clients. Europol has been listed on the Chinese-version of NASDAQ since January 2014.

Europol also offer loans to its buyers. For example, the company allows buyers to order steel from steel manufacturers by paying a 20% deposit. Buyers can then finance the remaining 80% with Europol.  Those buyers begin paying for the financing after they receive the final products from Europol.

Europol generates revenue from the commission it takes from the online transactions and charges collected from other services.  

The company says it is planning to expand its B2B business into selling other industrial products, such as plastics. Europol also plans to sell furniture products online to consumers.

However, Europol reported its revenue dipped 2.3% to 1.769 billion yuan ($269.1 million) in 2015 from 1.810 billion yuan ($275.4 million) in 2014.

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The company says steel prices in China plummeted 30% in 2015 and its steel business also was hurt by the steel traders’ meltdown in China.

Steel traders’ meltdown refers to a series of bankruptcies by steel traders in China that started several years ago. When the steel market was booming, Chinese banks increased their lending to steel trading companies. Many steel traders invested that money illegally into the stock market and housing market to reap huge profits. After the steel market suddenly cooled down, many steel traders couldn’t pay off their debts to banks. The situation got worse as steel traders often guaranteed debts for each other. As a result, a large amount of steel traders have had to close their businesses.

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