Chinese steelmakers’ profits tumbled 71% on year in Jan – Sept, face weak demand, expectations – industry body
Chinese steelmakers’ profits tumbled 71% on year in Jan – Sept, face weak demand, expectations – industry body

Chinese steelmakers’ profits tumbled 71% on year in Jan – Sept, face weak demand, expectations – industry body

China’s major steel makers made a total of 92.8 billion yuan in profit in the first three quarters of the year, slumping 71.34% from a year earlier, according to data compiled by the China Iron and Steel Association.

The companies made a revenue of 4.87 trillion yuan in the nine-month period, sliding 9.3% from a year earlier, and their operating cost reached 4.5 trillion yuan in the period, falling by 4.7% from a year ago, showed the data.

The steel sector is facing a number of difficulties including a slow recovery of market demand, weak market expectations and elevated coking coal prices, etc, said the association.

China’s apparent consumption of steel reached about 741 million tonnes in the first three quarters of the year, falling by 4.2% from a year earlier, said the association.

Among major steel-consuming sectors, various indicators for the real estate sector have weakened continuously, while the machinery and automobile manufacturing sectors have growing slightly, it said.

The average cost for purchasing coking coal surged by 51.1% in Jan – Sept from a year earlier, the cost for purchasing PCI coal jumped 40.4%, while the cost for importing iron ore declined from a year earlier, remained higher than the levels in the same period in 2019 and 2020, it said.

Due to the impact of Covid outbreaks and rising energy prices, steelmakers’ logistics cost have also climbed significantly, adding pressure on their cost, it said.

China will accelerate efforts to promote mergers and acquisitions (M&A) to increase the industry’s concentration and profits amid challenges such as an increasingly complex international landscape, COVID-19 outbreaks and surging raw material prices, the association.