Banks call in loans to troubled steel sector

China's steel industry will face higher financial risks in the second quarter in addition to its existing bad debts, experts say.

The credit woes in steel production are likely to bring funding risks in iron ore trading, according to Beijing-based Lange Steel Information Research Center.

Xu Liying, of the research center, said financial risks have extended from steel trading to such commodities as iron ore because of the tight liquidity of domestic steel companies.