According to Mr Deng Qilin GM of Wuhan Iron & Steel Group Co Ltd, steel industry profitability decreased last year and large and medium steel enterprises average sales profit margin witness only 2.91% last year far lower than national industries average profit margin of 6%.
As for the decreasing profitability, Mr Deng believed that it is the result of internal causes coupled with external causes
1. China steel supply and demand conflict is prominent due to the large amount. China crude steel output topped 0.63 billion tonnes last year, which surpassed requirement of the national economy. The oversupply in domestic steel market advanced decrease of steel prices
2. The international iron ore prices increase squeezed steel industry profit space. Deng said that procurement costs of imported iron ore, coking coal and other raw materials has been continuously increasing since the beginning of last year. China imported iron ore reached over 0.6 billion tonnes while the prices rise generated loss of several CNY 100 billion in steel industry every year.
Confronted with great pressure of cost increase, Mr Deng said that the national steel industry should seriously put into practice of steel polices including industry revitalization plan and adjust product structure against market fluctuation.
Mr Deng Qilin WISCO GM officially stepped down the position of president of China Iron & Steel Association in February this year. As the president of CISA for two years, Mr Deng led China steel enterprises successfully against international economy crisis.
As for the decreasing profitability, Mr Deng believed that it is the result of internal causes coupled with external causes
1. China steel supply and demand conflict is prominent due to the large amount. China crude steel output topped 0.63 billion tonnes last year, which surpassed requirement of the national economy. The oversupply in domestic steel market advanced decrease of steel prices
2. The international iron ore prices increase squeezed steel industry profit space. Deng said that procurement costs of imported iron ore, coking coal and other raw materials has been continuously increasing since the beginning of last year. China imported iron ore reached over 0.6 billion tonnes while the prices rise generated loss of several CNY 100 billion in steel industry every year.
Confronted with great pressure of cost increase, Mr Deng said that the national steel industry should seriously put into practice of steel polices including industry revitalization plan and adjust product structure against market fluctuation.
Mr Deng Qilin WISCO GM officially stepped down the position of president of China Iron & Steel Association in February this year. As the president of CISA for two years, Mr Deng led China steel enterprises successfully against international economy crisis.
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