Latest figures show continued struggle for Chinese steel industry
http://www.oriental-cherry.com Industrial trend 5/27/2013
China Daily reported that China 's steel industry continued to suffer from weak demand and thin profits during the first quarter, and the situation could continue for the rest of the year as prices keep falling.
The latest data from the China Iron and Steel Association show that the profit margin across the domestic steel industry dropped to 0.9%, delivering collective industry profits of CNY 2.5 billion (USD 406 million) for the quarter.
Mr Xue Heping, an expert with the association, said the profit level was too small for an industry with total assets worth CNY 4.3 trillion.
Thirty of the country 's 86 large and medium scale steel companies reported losses in the first quarter, five fewer than the same period last year, the association 's figures showed.
The loss making companies reported a total loss of CNY 6.1 billion during the period, against losses of CNY 9.4 billion at the same stage in 2012.
Although the number of steel companies in the red is less than during the same period last year, Mr Xue said that it did not mean the industry was likely to improve in months to come. He said that "Although the industry performed better than in the same period last year, it is still questionable whether they can even maintain these low profit levels."
During the quarter, the inventories of the 86 large and medium scale steel companies reached CNY 583.1 billion, CNY 10.2 billion higher than the same period last year, which puts increased pressure on their sales and marketing operations to clear the growing stockpiles
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