Qu Xiuli, secretary general of the China Iron & Steel Association (CISA), predicted China’s crude steel output to exceed 1 billion tonnes or grow 3-5% on year for 2020 on the backup of strong demand when she spoke at the press conference on October 26 sharing the country’s third-quarter steel market performance.
As for the last quarter, in tandem with the modest softening in demand when winter comes to North China, steel output will ease marginally too, she said, sharing that China’s steel output grew 1.2% on year in the first quarter, up 1.7% on year in Q2 and surged 10.3% in Q3 as demand from the infrastructure, auto, home appliances had recovered fast.
For the fourth quarter, China’s steel prices will stay rangebound, as most of the Chinese steel mills have secured rather sufficient bookings, and high production cost will prevent substantial declines, while rather high production will minimize chances of price surges, she added.
Despite a rather solid fundamentals, Chinese steel mills’ profit margins declined by 0.66 percentage point to 4.05% on average over January-September, as their complete costs grew by 6.13% on year in total that offset the 5.44% on-year rise in sales revenue, she pointed out, emphasizing, “the faster growth in imported iron ore prices than the steel prices have curtailed the steel mills’ profitmaking.”
By the end of September, the debt-asset ratio among the Chinese steel mills averaged 63.3%, or 0.53 percentage point lower on year, and the country’s steel industry may achieve a total profit of Yuan 180 billion ($26.8 billion) for the whole 2020, being flat of down slightly on year, according to her.
Among the core targets for the Chinese steel mills in the foreseeable future are self-discipline in steel output, cost control, low carbon development, acceleration in mergers and acquisitions and optimization in the capacity allocation, and high-quality and sustainable development, she highlighted.
China’s key steel mills have been progressing steadily towards being eco-friendlier, and by the end of September, they had reduced power consumption in steelmaking by 0.05% on year to about 551.5 kg/tonne in standard coal, cut water consumption by 4.3% on year, and decreased sulfur dioxide emission by 15.4% on year, according to her.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Photo: World Steel
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