Losses continue in Chinese steel

Hebei Steel expects net profit between RMB 39-118 M (US$6.27 -18.98M) for the first six months of 2013, down 70 to 90% from a year earlier. Earnings per share is expected to be RMB 0.011 to 0.004 during the period. It said excess supply and competition led to low steel prices in the first half of the year.

Shougang made a net loss of RMB 250-300M ($40.2 – 48.2M) in the first six months of 2013, but this was less than the loss of RMB 349.43M ($56.2M) in the same period last year. Shougang is going through an asset restructuring operation leaving only cold-rolled strip and some wire rod production in its main steel business. Despite this, so far the company has failed to make a profits despite adjusting product mix and cutting costs in the first half year. It said the entire business environment of the Chinese steel sector was extremely difficult in the first half of this year.

Sansteel MinGuang Co expects to see losses between RMB 30.65 and 35.25M ($4.93-5.67M) for the first six months. It is the first time for the SME-board-listed steelmaker to incur a loss. In its first-quarter report, the company had expected a net profit of RMB 24.53-29.13M ($3.9 – 4.68M).

VALIN Steel is expecting a net loss of between 373M and RMB 393M ($60.0 – 63.2M) for the first half of this year, the biggest loss expected among 17 companies forecasting. In H1 2012, VALIN Steel incurred a loss of RMB 1.304bn ($209.7M).

Maanshan Steel (Masteel) expected a half-year loss below that of last year’s same period, which was then at RMB 1.89bn (304.0M).

ZhongYuan Special Steel Co incurred a loss of RMB 31.61M ($5.08M) in the first half of 2013, compared with a profit of RMB 4.99M ($802k) in the same period year. The company obtained RMB 42.39M (6.82M) for selling shares in SANY Group in the first half of 2012, which largely boosted its revenues last year.

Anshan Steel, however, unexpectedly forecast a net profit of RMB702M ($112.9M) for the first half of the year. Analysts say Anshan Steel avoided losses mainly through selling loss-making assets to its parent company.

In H1 2012, the major steelmakers combined lost was RMB 1.976bn (317.8M).

Source: China Metals e-mail chinametal@xinhua.org