Stabilizing forces set to prop up the steel sector
Updated: 2014-02-28 08:22
By Du Juan (China Daily)
|
|||||||||||
She said it was the toughest year for China's steel companies since 2012, when they suffered from high raw material costs and falling prices in the market.
The major steel companies, accounting for 80 percent of the country's total output, saw an overall profit of 1.58 billion yuan ($254 million) in 2012, a 98.22 percent drop from the previous year, according to the China Iron and Steel Association.
Zhang Changfu, secretary-general of the association, said it was "extremely harsh" that such a huge industry had achieved such low profits.
|
|
China imported 819.76 million tons of iron ore in the past year, a 10.3 percent increase compared with the previous year.
The average iron ore import price remained flat, at about $128 a ton.
But Li said prices of imported iron ore were still higher than domestic ones.
"Under such circumstances, giant iron ore producers have been swallowing the steel companies' profits," said Li.
He said China's steel industry is bound to face meager profits as it shifts to a slower, more stable growth model.
"Challenges are ahead," Li said. "The severe overcapacity problem in the industry caused vicious competition. The central government has been taking measures to cut capacities that cannot meet the environment standards."
Plus, he said, more rigorous environmental standards for production will bring higher costs directly to companies.
Rising costs for steel mills also will come from ongoing pricing reform of resources such as water, electricity and natural gas, Li said.
Li also said Chinese steel producers will face tougher trade protectionism this year as many countries want to protect their own industries, build employment and revitalize their economies.
In 2013, there were 17 cases of trading investigation targeting Chinese steel companies' exports.
|
|
China's top 10 richest cities |
Related Stories
China's overcapacity easing: Deutsche Bank 2014-01-15 09:40
Baosteel opts for markups in weak market 2014-01-15 07:19
Demand for iron ore and steel to rise in 2014 2014-01-14 11:24
Hebei faces huge cuts in steel capacity to reduce pollution 2013-12-28 08:15
POSCO, Tangsteel form LED joint venture 2013-12-27 09:16
China gets tough on overcapacity 2013-12-26 17:02
Today's Top News
Armed men seize govt HQ in Ukraine's Crimea
Xi looks to a nation of cyberpower
UK, Germany at odds on EU reform
Asset theft is top economic crime
New Ukraine ministers proposed
Attemped attacks on chemical convoy
Guitarist Paco de Lucia dies
US senators scold Swiss bank in tax spat
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Mandarin or dialect? |
Landing scare grounds homemade planes |
Scientists search for clear answers on smog |
Safeguarding China's sunken riches |
Banknote buys new vision of history |
Death of panda spurs concerns |