SHANGHAI: The sharp fall in commodity prices in the recent months has caught many domestic enterprises off guard.

But even the veteran investors familiar with China's unpredictable corporate scene were surprised at the estimated losses of Baosteel due to misjudgments in the violent price swings of nickel, a key ingredient in steel production.

"Each ton of stainless steel requires at least 80 kg of nickel. With nickel prices peaking, the steel industry can hardly operate as the cost is too high for us," said Xu Lejiang, president, Baosteel, at a recent forum in May.