China's Steel Mills Post CNY29.1 Billion Loss In December

According to latest data from China Iron & Steel Association, its 71 large and-medium-sized steel members have posted combined loss of CNY 29.1 billion in December 2008, following losses of CNY 5.84 billion in October and CNY 12.8 billion in November

An official from the industry association told the China Securities Journal that the loss in the month soared 129% from the month before, and sent the total deficit in the last quarter to CNY 47.635 billion. Forty-four mills, or 62% of the total, reported total deficit of CNY 30.5 billion in the month up 118% from the previous month.

Mysteel senior analyst Mr Xu Xiangchun noted that the tumbling steel prices and the loss for stocks devaluation have sharpened the loss in December. He told reporters that "Big mills lost more, with some even suffering red of some CNY 10 billion. Many mills have reported loss of over CNY 1 billion in the month, mainly big ones, with some of their gross profit margin have slumped below negative 10%.”

Mr Xu said that despite the huge losses, market sentiment is improving along with profit margins, reflected in the 80-day price uptrend, the best in seven years.

Meanwhile, daily steel production is moving up. In December 2008, daily crude steel output was 1.22 million tonnes rising to 1.29 million tonnes in Jan 2009.

Source: Steel Guru