Chinese steel industry gains profit margin of less than 3pct

Thursday,03 Marh2011 | My Steel

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.

Steel prices remain flat in thin trade

By Press Trust of India
New Delhi Feb 23, 2011, 15:57

Quiet conditions prevailed in the local steel and iron market today as prices continued to move in a limited range on restricted buying and settled around previous levels.

Traders said restricted buying activity against adequate stocks kept steel prices steady.

Following are today's quotations in Rs per tonne:

CTD saria (Kamdhenu) 8-mm 41,700, 10-mm 43,400, 12-mm 42,100, 16-25 mm 39,950

Saria Jai Bharat (ISO 9002) 8-mm 39,150, 10 mm 38,350, 12-mm 37,550, 16-25 mm 37,550

Amba saria (ISO-9002) 8-mm 38,000, 10-mm 37,300, 12-mm 36,700, 16-25-mm 36,500

Amba shakti: (TMT) 8-mm 37,000, 10 mm 36,000, 12 mm 35,400, 16 to 25 mm 35,200

M S Angle: (50x5) (50x6) 33,000, (40x5) (40x6) 33,500

Angle capital (ISI) (40X5) (40x6) 36,900, (35X5) (65X6) 33,900

Garder (joist) (150x75) 33,500 (175x85) 32,500 (200x100) 33,300 (125x70) 33,600

T-IRON (40X5)(40X6)(50X6) 33,500

(sourced:business standard)

CISA sees Chinese steel prices seen rising in near term

Saturday, 19 Feb 2011

Reuters quoted the China Iron & Steel Association as saying that steel prices in the Chinese domestic market will continue rising in the near term due to recovering demand and rising raw materials costs.

CISA said that it expects a gradual pick up in demand at home and abroad with costs of raw materials such as iron ore, coke and scrap likely to keep surging, pushing steel prices upwards.

It said "This year is the opener of the 12th five year plan, so steel demand will remain strong as economic growth is expected to remain healthy."

It added that major steel consuming sectors such as construction, machinery, transportation, home appliances and shipbuilding would continue to grow, lifting steel demand, noting that infrastructure projects would also contribute to rising demand.

The Ministry of Industry and Information Technology forecast earlier this week that China crude steel output would hit a record 660 million tonnes this year with downstream demand providing a boost.

However, CISA also warned that non steel mill steel product inventories had risen sharply and domestic steel production is also on the rise.

CISA data showed that China produced 1.7033 million tonnes of crude steel on a daily basis in January up by 2.5% from December.

Non steel mill inventories of five major steel products in 26 big cities rose 11.2% to 14.72 million tonnes in January from the previous month especially for rebar and wire rod used in the construction sector.

(Sourced from Reuters)

Chinese CRC, HDG export offers rise further

Feb14, 2011

Chinese mills have further raised their export offers of cold rolled coil and hot-dipped galvanized coil in response to better demand and higher domestic prices. Typical export offers are at $880-890 per tonne fob for 1mm HDG, and $850 fob for 1mm CRC, an increase of $50-60 per tonne from January 19. Bookings are mostly at $860-870 fob for HDG, with base CRC....for more info visit www.metalbulletin.com

Tags: China , CRC , HDG , export , Shanghai bureau, cold rolled coil, hot-dipped galvanized coil, domestic prices

Price hike by Indian steel majors in offing on February opening

Monday, 31 Jan 2011

BL reported that on the backdrop of rise in iron ore and coking coal prices, Indian steel companies are set to hike prices by INR 1,000 to INR 1,500 a tonne in February.
As per report, some of them such as TATA Steel, JSW Steel and Essar Steel have hinted at a possible increase, there has been no reference to the quantum of the hike.

The report cited Mr Vikram Amin director sales & marketing as saying that “If domestic prices are higher, there is always a chance of cheap imports. At present, international prices are higher.”

Mr Jayant Acharya director sales & marketing of JSW Steel said that costs of raw materials have jumped substantially in the last few months and as a result, steel prices have had to move in tandem with input costs.(sourced:BL)