Thursday, 21 Jul 2011 | Mysteel
It is reported that steel output kept in high level due to rapid release of crude steel production capacity in H1 of the year.
According to news issued by NDRC, national crude steel output during January to May was 290.35 million tonnes up by 8.5%YoY and steel output at 358.66 million tonnes up by 12.3%YoY.
Latest statistics by CISA showed crude steel output of 76 key enterprises in late June was 16.9231 million tonnes up by 3.21% compared to mid June. Considering no output report from three enterprises, it is estimated that total crude steel output may be 20.1805 million tonnes in late June with average daily output firstly hitting 2 million tonnes.
It is worth noting that the growth of crude steel output has shown obvious decline. During January to May the growth of national crude steel output slowed by 15.3% with growth of steel output cut by 15.2%, indicating the falling demand on the market. High temperature and heavy rains in most districts of China affected infrastructure construction, dampening demand for longs and flats.
Monitoring data showed social inventory in China ramped up, for instance, the national social inventory index was 166 points on July 1 up by 0.07% WoW turning to rising trend from decline in last week despite the inventory was still 2.7% lower than last month and 6.29% lower than the same period of last year.
The profitability of steel mills is not good with sales profit at 2.86% for national steel industry in H1 of the year far lower than one year bank interest rate and the average profit level 6.2% of national industrial enterprises. Actually, there are four years that steel industry profit was lower than one year bank interest rate.
High cost is the key factor to curb steel mills to make profits.
According to statistics by NBS, the purchasing prices of industrial producers rose by 10.55YoY in June in which fuel and power increased by 12%. In addition, the CIF price of imported iron ore in May was USD 167.15 per tonne hitting record new high up by 4.18%MoM or 30.06%YoY given CSPI only rose by 12.86% during the same period. Despite the Q3 iron ore prices issued by 3 giant miners kept in line with Q2, rapid release of domestic crude steel output bolstered iron ore prices in Q3.
In general, though the capital scale becomes larger and larger with high growth in sales, the continuing low prices of products and surging costs of raw materials caused low profitability of steel industry. China steel industry should speed up upgrading and foster new profit growth.
It is reported that steel output kept in high level due to rapid release of crude steel production capacity in H1 of the year.
According to news issued by NDRC, national crude steel output during January to May was 290.35 million tonnes up by 8.5%YoY and steel output at 358.66 million tonnes up by 12.3%YoY.
Latest statistics by CISA showed crude steel output of 76 key enterprises in late June was 16.9231 million tonnes up by 3.21% compared to mid June. Considering no output report from three enterprises, it is estimated that total crude steel output may be 20.1805 million tonnes in late June with average daily output firstly hitting 2 million tonnes.
It is worth noting that the growth of crude steel output has shown obvious decline. During January to May the growth of national crude steel output slowed by 15.3% with growth of steel output cut by 15.2%, indicating the falling demand on the market. High temperature and heavy rains in most districts of China affected infrastructure construction, dampening demand for longs and flats.
Monitoring data showed social inventory in China ramped up, for instance, the national social inventory index was 166 points on July 1 up by 0.07% WoW turning to rising trend from decline in last week despite the inventory was still 2.7% lower than last month and 6.29% lower than the same period of last year.
The profitability of steel mills is not good with sales profit at 2.86% for national steel industry in H1 of the year far lower than one year bank interest rate and the average profit level 6.2% of national industrial enterprises. Actually, there are four years that steel industry profit was lower than one year bank interest rate.
High cost is the key factor to curb steel mills to make profits.
According to statistics by NBS, the purchasing prices of industrial producers rose by 10.55YoY in June in which fuel and power increased by 12%. In addition, the CIF price of imported iron ore in May was USD 167.15 per tonne hitting record new high up by 4.18%MoM or 30.06%YoY given CSPI only rose by 12.86% during the same period. Despite the Q3 iron ore prices issued by 3 giant miners kept in line with Q2, rapid release of domestic crude steel output bolstered iron ore prices in Q3.
In general, though the capital scale becomes larger and larger with high growth in sales, the continuing low prices of products and surging costs of raw materials caused low profitability of steel industry. China steel industry should speed up upgrading and foster new profit growth.
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