Highsee Iron and Steel Group, formerly the largest privately owned steelmaker in China’s central Shanxi province, is expected to reopen its furnaces this May after instituting a bankruptcy reorganization plan, an insider said.

“The Beijing-based Jianlong Group is gradually resurrecting the production line of Highsee Group after taking over the company,” the source explained.

In its heyday, Highsee Group had an annual production capacity of 5.6 million tons of iron and 6 million tons of steel. However, due to overcapacity and mismanagement, the company was forced to halt its production on March 19, 2014. Nine months later, a local court officially accepted its declaration of bankruptcy.

Soon after, Jianlong Group acquired the four subordinate companies of Highsee Iron and Steel Group for 3.73 billion yuan ($576.7 million), gaining full control of the companies.

The total liability of Highsee Group was nearly 26 billion yuan, including 10 million yuan of bank debt. The settlement rate for unsecured ordinary creditors was only 4 percent.

Although de-capacity has become the general trend for the industry, Wang Guoqing, Director of the Lange Steel Information Research Center, said that now seems like a good time to restore production given that the domestic steel market is gradually warming up and different types of materials are regaining their profitability.

According to statistics published on custeel.com, an information authority for the steel industry, around 60 furnaces — with a volume of 45,930 cubic meters — have been reopened since February. March alone saw 46 furnaces reopened. As a result, daily crude steel production in mid-March was up to 2.16 million tons.

Liu Zhenjiang, Party Secretary of the China Iron and Steel Industry Association, warned that output control is still crucial when de-capacity is not fully achieved. Otherwise, supply will still exceed demand.

“Especially as steel prices are rebounding this year, we need to stay in control of the production,” Liu added.