Overcapacity brings losses in steel sector
May 8, 2014 Category Automotive Metals & Minerals, Metals
Crude steel output increased 2.37% year-on-year in the first three months of this year to 202.7 million metric tons, the China Iron and Steel Association (CISA) said. That translates to a daily output of 2.25 million tons and an annualized 822 million tons for 2014. Severe overcapacity brought a CNY2.33 billion loss for major domestic steel companies in the period, compared with a CNY3.3 billion profit in the year-ago period, said Zhang Changfu, Vice Chairman of CISA. He cited high iron ore costs, rising spending on carbon emissions and falling prices for the result and said industry profitability is expected to improve, but still struggle, in the second quarter. The domestic price of unit steel products dropped 10.14%, or CNY368 a ton in the January-March period. The average price of export steel products was USD794 a ton, down USD63 year-on-year. Weak demand and increased output produced high steel inventories, which by end-March stood at 19.41 million tons, up 43.65% from the start of the year. Li Xinchuang, Director of the China Metallurgical Industry Planning and Research Institute, told China Daily that under those circumstances, no new steel capacity should be added for any reason. Still, fixed steel-sector investment during the first quarter was CNY89.3 billion, of which CNY71.6 billion came from the private sector. Some large companies, including Baosteel Group Corp and Tangshan Iron and Steel Group Co, plan to raise their non-steel business to 50% of their portfolio to survive.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world