Chinese steel mills encountered low profit operation with enlarged production scale these years and its crude steel output covered nearly 50% of the total output in global market. In the first half year, the key steel enterprises gained over CNY 50 billion in total and the whole steel industry paid CNY 104 billion more on the increasing iron ore prices.
The surveyed 77 CISA units' sales profit ration only totalled 3.14% in 1H this year down by 0.40%YoY. And Baosteel profits accounted for 20% of the total while most other mill gained slight profits or lose profits.
As the largest iron ore buyer in global market, Chinese steelmakers seriously depended on ore imports which was one of the main drivers behind the profit losses for domestic state owned steel mills. However, some small or medium sized mills profit ration would be higher than the large ones as they owned more flexible managerial methods and the large sized mills should roll out higher end steel products to maintain their development