In the January-July period of the current year, Chinese steelmakers - all members of the China Iron and Steel Association (CISA) - registered a sales revenue of RMB 2.43 trillion ($0.34 trillion), up 9.75 percent year on year, while their costs increased by 14.4 percent in the given period, as a result of which they posted a gross profit of RMB 123.582 billion ($17.5 billion) for the period, down 23.93 percent year on year, as announced by the CISA.
According to the CISA, rising iron ore and scrap prices in the given period have contributed to the declines in the gross profits of steelmakers. For instance, the costs of purchasing domestic iron ore rose by 19.88 percent year on year in the given period, the costs of purchasing import iron ore rose by 29.13 percent, while scrap purchase costs increased by 10.03 percent year on year.
Commenting on the current situation, the CISA stated, “The escalation of Sino-US trade frictions has exerted a negative impact on the global economy, while China has implemented a series of measures to stimulate consumption and stabilize economic development, which will positively affect demand for finished steel.” However, the CISA also urged Chinese steelmakers to implement production at a rational pace and to ensure the steady development of the Chinese steel market.