At a conference held by the China Iron and Steel Association (CISA) on April 26, the association stated that demand for steel improved in the January-March period this year amid the good start in economic development. Steel demand in downstream industries stabilized, resulting in year-on-year rises in crude steel output and in apparent consumption of crude steel.
However, supply of steel was higher than the growth in steel consumption, while inventories of steel increased year on year. The year-on-year decline in finished steel prices was steeper than the decline in raw material prices, while the profitability of the steel industry was at relatively low levels.
According to the CISA, the gross profits of large and medium-sized steel enterprises in China - all CISA members - amounted to RMB 2.545 billion ($0.4 billion), RMB 2.859 billion ($0.41 billion) and RMB 10.325 billion ($1.5 billion) in January, February and March this year, respectively.
In the first three months, CISA member steel enterprises registered an overall operating revenue of RMB 1.5545 trillion ($0.22 trillion), up 2.24 percent year on year, while posting a gross profit of RMB 15.968 billion ($2.3 billion), down 71.49 percent year on year.
The CISA said that China would vigorously promote joint restructuring to improve industrial concentration. The joint restructuring of steel enterprises is not only beneficial to optimize industrial layout, reduce homogeneous competition, improve bargaining power with upstream and downstream industries, but is also conductive to the integration of technology research and development, the CISA noted.