CHINA: The Chinese iron and steel industry has encountered a significant setback, with net profits dropping by 34% during the first nine months of this year, as reported by the latest official data. The decline in profits is attributed to oversupply issues and was exacerbated by the strengthening of the US dollar, which had a dampening effect on declining iron ore prices.
Data from the China Iron and Steel Association (CISA) revealed that Chinese iron and steel companies collectively reported a cumulative net profit of CNY 62.1 billion (USD 8.5 billion) for the period ending on September 30. However, their total revenue also witnessed a decline, falling by 1.7% to CNY 4.7 trillion (USD 642.8 billion), with an average profit margin of 1.3%.
Notably, the production of crude steel, pig iron and steel saw increases of 1.7%, 2.8%, and 6.1%, respectively, during the first nine months, reaching figures of 795 million tons, 675 million tons, and 1 billion tons compared to the previous year. Steel exports demonstrated notable growth, surging by 32% to 66.8 million tons.
Jiang Wei, Vice Chairman and Secretary-General of the CISA, emphasized that China’s iron and steel industry has made stable progress in the high-end, intelligent, and green transformation direction in the first nine months of this year. The demand for high-end steel continued to rise, and steel consumption in various manufacturing industries, including shipping, automotive, home appliances, wind power, and photovoltaic sectors, continued to expand.
Moreover, Jiang revealed that by the end of last month, 96 iron and steel companies had completed ultra-low emission transformation, assessment, and monitoring. The integration of digitalization, intelligence, and steel manufacturing has been actively pursued by steel firms.
Jiang pointed out that steel production is expected to decline in the fourth quarter due to regulations, energy consumption restrictions, and environmental protection policies. Nevertheless, he expressed optimism about a gradual recovery in steel demand, attributed to policies aimed at stabilizing the economy. Strong demand from the automotive, home appliance, shipping, wind power, nuclear power industries, as well as infrastructure construction, are expected to be pivotal factors in boosting steel demand in the near future.
