In the first half of the current year, Hunan Province-based Chinese steelmaker Valin Iron and Steel (Hunan Valin Steel) produced 8.57 million mt of pig iron, 10.50 million mt of crude steel and 9.90 million mt of finished steel, up 11.30 percent, 12.18 percent and 12.50 percent year on year, according to the company’s report. Higher sales of high-value added products (HVA) were the main driver of the overall operational results.
“The sales volume of key steel products was 4.48 million mt, a year-on-year increase of 20.43 percent,” the producer said. Among these products were high quality heavy plates, as Valin Steel was strengthening its positions to compete with such giants as Nippon Steel, POSCO and ArcelorMittal. In addition, the company managed to increase sales of pipes and steel products to the machinery sector.
Nevertheless, Valin Steel posted a sharp drop in financial results for the first half of the year. The company registered an operating revenue of RMB 48.337 billion ($6.87 billion) in the first half of the year, up 11.17 percent year on year, but posted a net profit of RMB 2.237 billion ($0.32 billion) for the given period, down 34.94 percent year on year. Valin Steel stated that rises in iron ore prices and the downtrend of finished steel prices contributed to the decline in net profit.
As for the coming period, Valin Steel expects that productions cut due to environmental protection measures will ease supply pressure in the Chinese steel market, while import iron ore prices will likely edge down to more reasonable price levels.