China steel firms forge profit upturn in 2013 - CISA
(Minews) - According to the China Iron and Steel Association, China’s steel industry rebounded in 2013 with its total profits hitting CNY 22.9 billion, a far cry from 2012’s meagre CNY 1.6 billion. However, the nation's steel industry still has to brace for hardship in the long run, citing soaring material cost and overcapacity.
CISA statistics showed that total sales of medium and large steel enterprises in China advanced 3.9% to CNY 3.7 trillion last year. Sixteen steel enterprises were still in the red, 10 less than the figure in 2012, incurring total loss of CNY 11.8 billion down 63.91%. Sales profit rate stood at 0.62%, 0.66 of a percentage point higher than the 2012 level.
Mr Li Xinchuang standing deputy secretary general of CISA said that local steel enterprises derived their profits last year partially from sidelines, which in some cases were major profit contributors.
Mr Wang Jianhua an editor at steel industry news webportal Mysteel said that some enterprises managed to turn a profit last year, mainly due to government subsidies or disposal of assets. Wuhan Iron and Steel for instance, raked in CNY 1.5 billion in profit in 2013, with profits from non core business topping CNY 3.1 billion which shows that its mainstream business was still mired deeply in the red.
Mr Zhang Changfu vice chairman and secretary general of CISA said that overcapacity will continue to dampen steel prices, until the government’s capacity adjustment program for the industry bears fruit, which will take time. The problem will be aggravated by soaring production costs and fund shortages among steel enterprises. It will take at least three to five years, before the aforementioned problems can be resolved.
Publish date : Thursday 13 February 2014 01:22
Story Code: 3447
