Large and medium-sized steel mills shrank by more than 30% in July

[China Ship Network (CnshipNet China)] The profit of the steel industry has once again shrunk. The "Economic Information Daily" was officially informed by the authority of the China Iron and Steel Association on August 31 that the 77 large and medium-sized steel mills included in the steel association statistics had a total profit of 8.588 billion yuan in July, compared with the profit of 13.305 billion US dollars in June. It was 4.17 billion yuan, a contraction of about 35.45% from the previous month, and a profit and tax of 14.741 billion yuan in the same period, a decrease of 21.59% from the previous month.

The person told the Economic Information Daily that the total profit of the 77 large and medium-sized steel mills from January to July was 65.208 billion yuan, although it was 20.6% higher than the same period last year. "But it is worth noting that the current steel industry profits have begun to fall sharply, and the steel industry will face a more severe situation in the second half of the year," the source said.

It is worth noting that in July, large and medium-sized steel mills achieved a sales profit margin of 2.75%, a decrease of 1.42% from the previous month. According to the latest data released by the National Bureau of Statistics, in the first seven months, the national industrial enterprises above designated size achieved a main business income of 458.544 billion yuan, a year-on-year increase of 29.8%, and the main business income margin was 6.11%, compared with the steel industry. The sales profit margin is far below this average.

“Because the price of imported iron ore has risen sharply, it has made the production and operation of the enterprise more difficult, and the steel enterprises are still in a low-efficiency state.” The above-mentioned steel association people admit that the high cost of iron ore is still an important factor restricting the steel industry. In July, the import of iron ore was 54.548 million tons. From January to July, the total imported iron ore reached 389 million tons, an increase of 7.81% over the same period of last year. The average import price was 163 US dollars/ton, and the price has increased by 40%. This also means that the steel industry has paid an additional 18.283 billion US dollars for iron ore imports, equivalent to about 119 billion yuan.

Coincidentally, the semi-annual report released by Baosteel on August 31 reaffirmed the above viewpoint. According to the semi-annual report, Baosteel achieved operating profit of 6.76 billion yuan in the first half of the year, down 36.82% from the same period of the previous year. The main reason for the decline in performance was that the board of directors of Baosteel indicated that it was affected by the sharp increase in the prices of major raw materials such as ore.

On the other hand, the high-yield status of the steel industry is also worrying. According to the latest statistics of China Steel Association, crude steel output in July was 59.3 million tons, an increase of 15.49%. From January to July, the cumulative crude steel output was 41.364 million tons, a year-on-year increase of 10.3%.