Speculation in China suggests that they gross profit per tonne of steel tonnage manufactured by the Chinese steel industry was less than CNY 100 per tonne in March. TX Investment Consulting speculates the combined loss for domestic steel producers in Q1 would exceed CNY 10 billion.
As per TX's report, in the first two months of this year gross profit for domestic ferrous metal smelting and rolling posted a loss of CNY 769 million down by 103.02% from a year ago and that for ferrous metal mining & dressing also fell 65.84% YoY to CNY 2.34 billion.
According to figures released by the Statistics Bureau the falling profits of the two industries indicate an overall steel industrial loss, with the falling range far exceeding the averaged 37.3% total profit drop for China's above-scale industrial enterprises. The further profit deterioration is due primarily to flagging demand. Statistics show that prices for coking coal in the first two months have fallen to CNY 1,200 per tonne lower than the same period of last year.
Profit growth for steelmaking down-stream sectors also turned negative in the period; of which transport & communication facilities manufacturing records the sharpest drop to negative 40.4% from 15.7% posted in last November. That for universal equipment manufacturing and specialized equipment manufacturing fell to minus 4.43% and minus 13.4% respectively from last November 20.36% and 9.4%.
The faltering demand also prolonged steel mills' destocking circle. China's steel inventories have mounted up week on week since January with stockpiles for flat and long products hitting 5.46 million tonnes and 5.87 million tonnes respectively by the end of February.
Source: Steel Guru
No comments:
Post a Comment