Chinese steelmakers see smaller Q1 profit growth

Chinese steelmakers see smaller Q1 profit growth

The profits of China's major industrial enterprises increased 17.2% year on year to RMB 276.4 billion ($33.3 billion) in the first quarter of 2005. The figure marks the lowest growth rate in the last 3 years. The coal, oil, and non-ferrous metal industries were the big winners during the first quarter, as raw material prices continued to surge. On the other hand, the sectors that depend on those raw materials for production saw their profit margins quickly shrink. The steel industry led those processing industries that saw a decline in profit margins. The jump in iron ore and coking coal prices, as well as Beijing's decision to reduce the export tax rebate rate for steel products, meant that the industry's profits increased only 18.4% year on year. While that number is slightly above the average of all major industrial enterprises, it represents a dramatic fall from the first quarter of 2004, during which Chinese steelmakers enjoyed a 118% explosion in year-on-year profits.