China’s iron and steel industry has shown strong resilience in reducing production

Market demand slowdown, raw material price volatility, enterprise cost pressure increased, enterprise profit sharply…… In the first half of this year, in the face of numerous challenges, China’s steel industry showed strong resilience in the process of reducing production.
Since the beginning of this year, in the face of the complex and severe international environment and the impact of the domestic epidemic, China’s steel industry has actively adapted to market changes, overcome difficulties such as logistics obstruction and rising costs, and made efforts to achieve stable operation and healthy development of the industry, making important contributions to the national stability of the macro-economic market.
Data from the National Bureau of Statistics showed that in the first half of this year, China’s crude steel production was 527 million tons, down 6.5% year on year; Pig iron production was 439 million tons, down 4.7 percent year on year; Steel production was 667 million tons, down 4.6 percent year on year.

“Market demand is lower than expected, steel production year-on-year decline”, China Iron and Steel Association Party secretary, executive chairman He Wenbo said, in the face of such market changes, the steel enterprises through reasonable arrangements for maintenance and other flexible measures, varying degrees to reduce pig iron, crude steel, steel output.

In the first half of this year, China’s crude steel production has maintained the trend of decreasing since last year, while the benefits of the steel industry have declined in the same period. According to the China Iron and Steel Association, from January to June this year, the total profit of key statistics member steel enterprises was 104.2 billion yuan (RMB, the same below), down 53.6 percent year-on-year. The profits in May and June were 16.7 billion yuan and 11.2 billion yuan, respectively. The number of loss-making enterprises increased, and the loss area expanded.

“There is no denying that the situation facing the steel industry is extremely complex, the challenges are unprecedented,” He Wenbo said, from the recent industry operation situation, the steel industry has entered a more difficult period. In the first half of the year, due to demand obviously less than expected, crude steel output decreased 6.5% year on year, operating revenue decreased 4.65% year on year, total profit decreased 55.47% year on year, the loss surface is still gradually expanding.

“In the first half of this year, the steel industry showed strong resilience in the face of a series of difficulties affecting the industry’s development.” Zhang Haidan, deputy director of the raw material Industry Department of the Ministry of Industry and Information Technology, said at the fourth meeting of the sixth General assembly of the China Iron and Steel Association held recently.

Zhang Haidan also pointed out that although the economic benefits of China’s steel industry in the first half of the year declined significantly, the overall asset situation of the industry is still at a historically good level, the asset-liability ratio of enterprises decreased year-on-year, and the debt structure continues to optimize. Through mergers and reorganizations, industrial concentration has continued to rise and the ability to resist risks has been enhanced. Many key enterprises have adopted measures to maintain steady growth and operation, effectively stabilizing market order.

Post time: Aug-18-2022