CISA reports 2.91 percent profit margin for Chinese steelmakers in 2010

On February 24, the China Iron and Steel Association (CISA) announced that in 2010 the average profit margin of the 77 medium-sized and large Chinese steelmakers which are members of the CISA was 2.91 percent - lower than the average for Chinese industry in general.
 
The CISA stated that in 2010 Chinese crude steel output totaled 626.654 million mt, up 53.087 million mt or 9.26 percent year on year. Luo Bingsheng, deputy chairman of the CISA, commented that in the first four months of 2010, crude steel output in China increased by 25.3 percent year on year, with monthly crude steel output peaking in April at 55.403 million mt. After May, the output volume decreased, with the September output down 13.09 percent from the April data. However, in November and December crude steel output in China rebounded.
 
In 2010, the 77 medium-sized and large steelmakers in CISA registered an aggregate net profit of RMB 89.713 billion ($13.63 billion), up 52.02 percent year on year.
 
On the other hand, raw material costs for Chinese steelmakers increased obviously last year. Compared with 2009, in 2010 prices of domestic iron ore fines increased by 46.44 percent, imported iron ore prices rose by 45.21 percent, metallurgical coke increased in price by 12.12 percent, while coking coal prices increased by 26.44 percent.
 
Mr. Luo concluded, "As costs for crude steel production increased, the profits of steelmakers and of the overall steel industry shrunk. In 2010, the profit margin of medium and large steelmakers in China was 2.91 percent, lower than the average level of all industries in China."