According to the China Iron and Steel Association (CISA) , in the first four months of the current year China's large and medium-size iron and steel enterprises earned an aggregate net profit of RMB 1.148 billion ($182 million), 96 percent lower than the RMB 34.213 billion ($5.41 billion) recorded in the same period last year. In comparison, the aggregate net profit of Chinese industrial enterprises in general in January-April indicated a decrease of just 1.6 percent year on year.
The CISA stated that the unsatisfactory profitability in the domestic iron and steel industry is attributable to the increased steel output in China combined with slower growth of demand, resulting in the lack of strength of steel prices.
Since the beginning of 2012, China's average daily output of crude steel has increased each month, and now exceeds 2 million mt. Meanwhile, average steel prices in January-April this year were down RMB 470/mt ($74.37/mt) compared to the same period last year, while the prices of raw materials only showed a RMB 200/mt ($31.65/mt) decrease when the same periods are compared.