Some 77 major steel makers across mainland China earned a total profit of 8.59 billion yuan in July, a month-on-month drop of 35.45 percent, reports www.cnchemicals.com, citing the China Iron and Steel Industry Association (CISA). Profits of the 77 in the first seven months totaled 65.21 billion yuan.
The firms' sales margin slipped 1.42 percent month-on-month to 2.75 percent in July. According to the National Bureau of Statistics, revenue of above-scale industrial enterprises grew 29.8 percent year-on-year to 45.85 trillion yuan in the first seven months.
One CISA insider said the surging import price of iron ore was the primary reason behind steel makers' weak performance. July iron ore imports totaled 54.55 million tons, and total iron ore imports in the first seven months grew 7.81 percent year-on-year to 389 million tons, with an average price up 40 percent to US$163 per ton.
Baoshan Iron and Steel posted a 36.82 percent decline in operating profits for the first half to 6.76 billion yuan. The company's board attributed the declined to surged costs on fuel.
CISA's data also showed that crude steel production grew 15.49 percent year-on-year to 59.3 million tons in July, and 10.3 percent year-on-year to 410.36 million tons in the first seven months. Full year production is estimated to exceed 700 million tons.
Steel prices remained high in August. With higher costs and greater production, steel sector growth may slow down in the second half, says chief consultant Xu Xiangchun at www.cnchemicals.com