Latest data shows that in the first three quarters of the year, the total profits of key steel enterprises decreased by 56.39% compared to the previous year.
On October 25th, the China Iron and Steel Industry Association held a press conference on the third quarter information.
According to the data released by the China Iron and Steel Association, in the first three quarters, the total operating income of key steel enterprises was 4.54 trillion yuan, a decrease of 6.87% compared to the same period last year; total profits were 28.977 billion yuan, a decrease of 56.39% year-on-year; and the average profit margin was 0.64%, down by 0.72 percentage points. By the end of September, the asset-liability ratio of key steel enterprises was 62.91%, an increase of 0.75 percentage points year-on-year.
The destocking efforts in the steel industry are still facing challenges. Data from the China Iron and Steel Association shows that by mid-October, social inventories of 5 major steel varieties in 21 cities totaled 7.31 million tons, a decrease of 0.32 million tons or 4.2% compared to the previous period. This is 1.69 million tons or an 18.8% decrease compared to the same period last year, but an increase of 0.02 million tons or 0.3% from the beginning of the year.
Jiang Wei, Vice President of the China Iron and Steel Association, stated that steel production has slightly decreased, domestic demand has further weakened, and the apparent consumption of crude steel has decreased more than production, highlighting the supply-demand imbalance. The steel prices remain low, steel exports have increased, and factors such as the difficulty in controlling rising raw material prices have contributed to a significant year-on-year decrease in industry profits. The industry is facing a situation of high production volume, high costs, high exports, low demand, low prices, and low efficiency.
The China Iron and Steel Association once again urges to prevent vicious competition and maintain market stability to reduce operational risks.
According to monitoring data from Wind, as of October 18, 2024, the spot price of rebar (φ25mm) was 3,834 yuan per ton, a decrease of nearly 1,500 yuan per ton compared to over 5,300 yuan per ton in May 2021.
This also indicates that the phenomenon of price competition continues to be prevalent in the Chinese steel industry.