| The TEX Report Topics < Iron Ore > | |
| HOME >> Topics List >> August, 2009 >> 10 (Mon) |
| Operations Of Chinese Steel Industry In January To June 2009 |
| = MIIT: 'Steel prices show upturn, profitability being improved' = |
|
On August 4 China's Ministry of Industry and Information Technology ("MIIT") analyzed and commented the operations of Chinese steel industry in the January to June period of 2009, according to which both production and prices of steel products are showing an upturn, with steel companies' profitability being improved. Meanwhile, MIIT warns that the excessive imports of iron ore are seriously disrupting the supply - demand balance of domestic iron ore as well as iron ore pricing negotiations. [Steel production in recovery, steel trade sees exports plunge] Recovery of steelmaking capacity is comparatively accelerating. According to the data of National Bureau of Statistics, nationwide crude steel production in the first half was 266.58 million tons (Mt), up 1.2% from the same period last year; steel production 316.48 Mt, up 5.7%; average daily crude steel production 1.473 Mt, of which production in June was 1.648 Mt. Long products are growing more firmly than steel plates and sheets. Such commodities as reinforcement bars, wires and rods, middle and small sized steel products, steel products for railways and welded pipes see demand increase and incremental rates of production comparatively high due to the impacts of the encouragement of investment; while middle and heavy plates, middle and heavy strips, cold-rolled steel sheets see demand decline and exports decrease, imbalance of supply and demand being noticeable, and production largely decline. Prices of steel products are turning upward. In the first half, prices of steel prices in the domestic markets stood low as a whole, but since May they have been gradually rising. According to the statistics of CISA, total price index of steel products as at the end of June rose up to 101.98 points, being 6.42 points higher than at the end of April. Imports of steel products surpass their exports. According to China's Customs Statistics, exports of steel products in the first half totaled 9.34 Mt, down 65.4% from the same period last year; imports of steel products totaled 8.13 Mt, down 1.8%; and semi-finished products (billets) 2.65 Mt, a 25.4-fold increase. Profitability at steel companies is being improved. The data of National Bureau of Statistics turn out that during January to May the metallurgical industry realized 17.9 billion RMB of profit, which was down 87.3% from the previous corresponding period, but the declining rate has been reduced by 2.8 percentage points compared with January to February. According to the survey of CISA, 71 large and middle scaled steel companies posted profit in the single month of May, and continued to secure profit in June, which amounted to 3.55 billion RMB in the month. [Excessive imports of iron ore disrupt trading balance] Iron ore imports in the first half were 297.215 Mt, up 67.33 Mt or 29.3% from the same period last year. Pig iron production during the same period was 258.799 Mt, up 13.640 Mt or 5.56%. Rising pig iron production during the first half increased iron ore consumption by 21.55 Mt, and iron ore imports by 67.33 Mt. In addition, taking into account the impacts of production cuts at domestic iron ore mines, iron ore imports still and clearly outnumber the level of demand reflecting increased iron production, which is increasing stockpiled iron ore discharged at domestic ports and demurrage, thereby further increasing the rising rates of ocean freight. At present, the number of licensed iron ore importers counts 112, with those actually engaged in import amounting to as large as 152. In addition, overseas iron ore miners are selling a large volume of iron ore to the spot dealing markets in China, to the extent of the ratio of spot-dealt imported iron ore reaching 82.74% in the total iron ore imports. Voluminous imports by trading firms have generated excessive imports of iron ore, and are seriously disrupting the supply - demand balance of domestic iron ore as well as iron ore pricing negotiations. To grasp in its totality, the set of plans issued by the government in the first half with a view to expanding domestic demand and to maintaining steady and rapid development of economy has worked well, and the steel industry has aggressively faced up to the adverse impacts of the international financial crisis, and under the circumstances where the international steel market is evidently shrunk, basically maintained stable production of crude steel, with a great number of steel companies managing to realize profit, and making new progress in energy-saving, reduction of hazardous emissions, as well as consolidations and restructure of the industry. As regards the second half year when Chinese economy is expected to come to an important time-point of upturn, the base for economic upturn is not yet steady; there are a plenty of uncertainties; and incongruity subsists between the steel industry and steel companies. The situation in particular is extremely serious with the direct export of steel products and the indirect export by way of steel-incorporated electrical equipment and machinery. It is hard to improve the sluggish export of steel products in a short span of time, and we need to take longer time to prepare for every sort of difficulty and complex situation, so as to realize steady and sustained development of the steel industry. |
| last modified : Mon 17 Aug, 2009 [13:10] |
