Zhao Minge, president of the China Iron and Steel Association (CISA), stated at the 11th Council Meeting of the Sixth Session of the CISA held at Caofeidian, Tangshan city, in Hebei Province during July 29-30 that the cumulative operating revenue of large and medium-sized steel enterprises in China - all CISA members amounted to RMB 2.9985 trillion ($0.42 trillion) in the January-June period this year, down 5.79 percent year on year, while with the operating cost of RMB 2.8055 trillion ($0.39 trillion), down 6.83 percent year on year, and the gross profit totaling RMB 59.2 billion ($8.3 billion), up 63.26 percent year on year, with the average profit margin at 1.97 percent, 0.83 percentage points higher than the same period of last year.
“Self-disciplined production control and stable operations are the main reasons for the improvement in steel industry’s profits,” said Zhao Mingge. On the one hand, production control has kept steel inventories low, resulting in basically balanced supply and demand, and relatively stable steel prices. On the other hand, it has led to a decline in demand for raw materials, dragging down cost level.
“However, it should also be noted that strong supply and weakening demand will be the main contradictions in the steel market. Although profits in the steel industry have recovered somewhat, the sustainability remains insufficient,” said Zhao.
6 key tasks to focus on
As for the second half of the year, China’s steel industry will focus on advancing six key tasks as below.
China will curb excessive competition and strive to improve the quality and efficiency of industry development.
The steel industry will keep investing in scientific and technological innovation to promote high-end, intelligent, and green development.
The steel industry will actively participate in the carbon market to accelerate the transition to green development.
The industry will promote high-end development, stabilize surrounding regions, and enforce strict regulations to ensure stable and orderly exports.
The industry will promote the development of steel structures and steel for emerging industries to continuously expand the application space of steel materials.
It will establish a high-end international exchange platform to advance the internationalization of the steel industry.