Chinese mills announced that net profits are expected to drop faster in the first nine months of the year due to the downtrend in the finished steel prices and the sharp rises in raw materials prices since the beginning of 2019, especially iron ore, which is still expensive.
Liaoning Province-based Chinese steelmaker Anshan Iron and Steel Co., Ltd (Angang) has issued its preliminary financial report on October 14, announcing that its net profit in the first three quarters will likely reduce to RMB 1.722 billion ($0.24 billion) or down 74.88 percent year on year, with the decreasing pace 6.97 percentage points faster than that recorded in the first half of the year. In the first six months of the year, Angang has posted a net profit of RMB 1.425 billion, down 67.91 percent year on year.
Most mills attributed the drop to weaker steel prices due to slack performance in domestic automobile industry and home appliances industry in the January-September and high raw materials costs.
Hunan Province-based Chinese steelmaker Hunan Valin Iron & Steel Co. (Hunan Valin Steel) has stated that its net profit attributed to shareholders for the first nine months of this year is expected to total RMB 3.3-3.5 billion ($0.24-0.28 billion), down 39.7-41.6 percent year on year compared to the net profit of RMB 5.476 billion in the same period of last year.
Shanxi Province-based Chinese steelmaker Taigang Stainless Steel Co., Ltd has stated that it expects its net profit for the first nine months of the current year to be in the range of RMB 1.7-2.0 billion ($0.24-0.28 billion), down 50.75-58.14 percent year on year. In the first half of the year, Taigang has posted a net profit of RMB 1.165 billion, down 58.9 percent year on year. The company stated that the rising prices of iron ore, nickel and other raw materials have contributed to the declines of its net profit in the given period.