In the first three quarters of this year, the losses of Chinese listed steel companies have already approached the total losses of the previous year, with industry insiders viewing the current situation as “extremely challenging for steel production and steel trade enterprises.”
Recently, the third-quarter financial reports of Chinese listed steel companies have been successively released, showing that the performance of these companies in the third quarter is generally declining, or even resulting in losses.
According to a report from Chinese media outlet “Caijing,” the financial reports indicate that Baosteel Group had the highest profit in the third quarter this year (a net profit of 1.338 billion Chinese yuan), while Angang Steel had the highest losses (a loss of 2.395 billion Chinese yuan), with a difference in net profit of over 3.6 billion yuan between the two companies.
However, despite Baosteel Group’s highest profit, its third-quarter earnings also decreased by 64.77% year-on-year.
Angang Steel stated that the substantial losses in the third quarter were mainly due to the price decrease of steel materials being greater than that of raw materials, further narrowing the profit margins.
Overall, from January to September this year, the average steel price in China was 103.88 points, a year-on-year decrease of 8.39 points. Except for the first two weeks of July, the Chinese steel price index has been consistently below 100 points for 10 consecutive weeks in the third quarter, hitting a new low in early September since November 2016. The total profit from January to September was 29.18 billion yuan, a decrease of 55.82% year-on-year, with a profit margin of 0.70%.
In the third quarter, out of the 27 listed steel smelting companies, 18 of them reported losses, with a total loss exceeding 14 billion yuan, compared to the total annual losses of 15.8 billion yuan for listed steel companies last year.
Xu Guangyou, Vice General Manager of Tianjin Youfa Steel Pipe Group, stated that in 2024, the Chinese steel market has been fluctuating due to both downward trends and periodic rebounds, with the added challenge of declining demand.
Han Weidong, Senior Consultant of Tianjin Youfa Steel Pipe Group Co., Ltd., believes that, “Currently, there is still oversupply in the steel industry.” This year has seen a drastic decline in demand and an issue of excess plate materials.
At a conference on the development of the steel industry chain for 2025 held last weekend, industry insiders unanimously expressed that steel prices have been low this year.
Tang Zujun, Vice Chairman of China Iron and Steel Industry Association, also mentioned that the steel industry this year faces the “three lows”: low demand, low prices, and low profitability.
Wu Zhangwen, Chairman of Steel Home, also stated, “The operation of steel production and steel trade enterprises is extremely challenging.”
Regarding the future development of companies, many steel industry leaders expressed cautious optimism. However, there was no significant change in steel orders in September, and the supply and demand situation in the steel industry has not fundamentally shifted. The trend of “strong supply and weak demand” in steel materials is likely to persist in the long term.
Zhu Ruirong, CEO of Nansteel, believes that for the next 3 to 5 years, most companies in the steel industry may remain in a state of meager profits or even widespread losses. Enterprises with weak competitiveness will face the risk of being eliminated.