As the release of annual reports from listed steel companies comes to an end, the first-quarter financial results are now being disclosed. While the annual performance painted a bleak picture for the sector, the first-quarter results show mixed outcomes, with some companies showing signs of improvement.
According to recent data, major players like Liugang Steel reported sales revenue of 9.4 billion yuan in Q1, down 3.8% year-on-year. Similarly, Shougang Steel saw a 2.5% decline in sales to 2.8 billion yuan. These figures highlight ongoing challenges within the industry. However, not all steel companies performed poorly. Jiuli Time, for example, recorded a 4.42% increase in revenue to 666 million yuan. Xining Special Steel also showed positive momentum, with operating income reaching approximately 1.691 billion yuan, up by 0.21 billion yuan compared to the previous quarter. Changbao’s quarterly revenue rose slightly to 884 million yuan, marking a 1.08% year-on-year increase.
Industry insiders note that the growing demand for special steel products, such as stainless steel, has led to better performance among specialized producers compared to traditional steel manufacturers. In the context of industry-wide efforts to phase out low-quality steel and promote high-strength alternatives, companies with a strong presence in sectors like new energy pipelines have seen their performance stand out.
Xining Special Steel’s improved performance is partly attributed to lower mining costs and reduced financial expenses. The company’s own mines benefited from a significant rebound in ore prices during the quarter, with domestic refined iron concentrate averaging 1,027 yuan per ton—a 12% month-on-month increase. This rise in raw material value boosted profitability. Additionally, the firm’s financial expenses dropped by 26 million yuan year-on-year to 114 million yuan, contributing significantly to its improved operating conditions.
Analysts from Shanghai Securities highlighted that while the overall performance of listed steel companies is expected to remain weak, some stocks may buck the trend. However, they caution that the steel index could still experience volatility in the coming months. “Investors should be cautious, especially when considering general steel stocks,†the report noted.
He Hangsheng, editor-in-chief of the business club’s steel division, pointed out that although downstream demand was weak in Q1, steel mills’ decisions to raise ex-factory prices helped support the performance of certain listed companies. However, he warned that with steel prices continuing to fall, many mills have already cut prices in May, and demand has yet to recover.
Looking ahead, He predicts that the second-quarter results for listed steel companies may worsen compared to the previous quarter. Wu Wen, CEO of "Steel House," added that the steel industry is entering a period of weak growth. He forecasts that domestic crude steel consumption will grow slowly from 2013 to 2015, followed by a more stable phase, with a potential decline after 2020.
Despite this, Chinese steel companies with cost advantages continue to expand production, leading to persistent oversupply in the market. For the next three years, the domestic steel market will likely face intense competition, and steel prices are expected to remain at low levels.Plastic Scraper,Plastic Scraper For Wallpaper,Multipurpose Plastic Scraper,Multipurpose Plastic Wallpaper Scraper
Jiangmen Nichiyo Decorative Material Co.,Ltd. , https://www.nichiyopt.com