China Precision Steel Inc. (NASDAQ:CPSL) makes specialty steel products for use in other industries. CPSL essentially takes pre-made blocks of steel and turns this "raw" steel into precisely measured steel pieces that serve as components in automobiles, microelectronics, and other manufactured goods. CPSL's products are also used in plane friction discs, appliances, food packaging materials, saw blades, and textile needles. The company earned $76 million in revenue and incurred a net loss of $408K in 2009.
Though it has no direct domestic competitors, CPSL does compete with larger foreign exporters to China, which account for 85-90% of the premium steel industry in China. However, due to technological and geographical advantages, CPSL offers its products at a 10% discount to international prices, and with shorter delivery times. CPSL is also actively searching for new business in foreign countries. Although most of CPSL’s sales are made in China, it exports its cold-rolled steel products to Nigeria, Thailand, Indonesia and the Philippines. The company plans to continue its international expansion and establish itself in the global thin sheet metal manufacturing industry.
China Precision produces a variety of specialty steel products. The main categories are low-carbon and high-carbon steel which are further delineated into the cold rolled and hot rolled categories.
Low carbon steel refers to approximately 0.05–0.15% carbon content while high refers to approximately 0.6–0.99% carbon content.  Low carbon steel is used in automobile body panels, tin plate, and wire products.  High carbon steel has greater hardness and can be used in high strength wires or springs. 
Hot and cold rolled refers to the temperature at which the steel is formed into shape. Hot rolled steel is formed while the steel is above the "scaling" temperature, or roughly 1700 degrees fahrenheit. Cold rolled refers to the opposite condition.  One major difference is that the final size of hot rolled steel has to be estimated, while cold rolled steel can be formed with greater precision. The size of the steel product changes as it cools. 
Iron ore costs have increased 65%, coking coal costs up 300%, and scrap prices has also jumped. Because raw materials were approximately 90% of CPSL's cost of goods sold (COGS), increases in commodity prices will decrease the company's profitability. If China Precision cannot continue to pass on higher production costs to its customers, its profits will suffer.
CPSL competes primarily with importers, including Ton Yi Industrial Corp. in Taiwan; Shinwha Special Steel Co., Limited in Korea, and CEW, a German steelmaker. CPSL does not have any direct manufacturing competitors based in China in the cold-rolled steel industry. However, the company warns that there are potential competitors who are currently constructing mills to produce precision and specialty steel products in China. CPSL has 50-70% of the China domestic production market share and about 10% of total production of specialty premium steel.