As the annual reports of listed steel companies are coming to an end, the release of first-quarter financial results is now underway. While the overall performance in the annual reports was bleak, the first-quarter results show mixed outcomes, with some companies reporting improvements in their operations.
According to recent data, several major steel firms saw a decline in revenue. For example, Liugang Steel reported sales of 9.4 billion yuan in the first quarter, down 3.8% year-on-year. Similarly, Shougang Steel recorded 2.8 billion yuan in sales, a 2.5% drop compared to the same period last year. However, not all companies performed poorly. Jiuli Time managed to increase its revenue by 4.42% to 666 million yuan, while Xining Special Steel saw a monthly rise in operating income by 210 million yuan, reaching approximately 1.691 billion yuan. Changbao also showed slight improvement, with operating income hitting 884 million yuan, up 1.08% from the previous year.
The improved performance of some steel companies can be attributed to the growing demand for special steel products, such as stainless steel. As the market increasingly favors high-performance materials, special steel producers are outperforming traditional steel manufacturers. This trend is especially evident in the context of industry-wide efforts to phase out lower-quality steel and promote high-strength alternatives.
Xining Special Steel’s improved operating conditions were partly driven by reduced mining costs and lower financial expenses. The company's own mines benefited from a significant rebound in ore prices during the first quarter, with domestic refined iron concentrate averaging 1,027 yuan per ton—up 12% from the previous month. Additionally, the company’s financial expenses dropped by 26 million yuan year-on-year to 114 million yuan, contributing to better profitability.
Analysts from Shanghai Securities noted that while the overall performance of listed steel companies remains challenging, some stocks may perform better than the market average. However, they warned that the steel index could still see further volatility. Investors are advised to remain cautious, particularly when it comes to ordinary steel stocks.
He Hangsheng, editor-in-chief of a leading steel industry publication, pointed out that although downstream demand remained weak in the first quarter, steel mills' price hikes helped support some companies’ performances. However, he cautioned that steel prices have continued to fall, with many mills cutting ex-factory prices in May. With demand still sluggish, He predicts that second-quarter results may worsen compared to the first quarter.
Wu Wen, general manager of "Steel House," forecasts that domestic crude steel consumption will enter a low-growth phase between 2013 and 2015 before stabilizing. By 2020, he expects a potential decline. Despite this, Chinese steel companies with cost advantages continue to expand production, keeping supply levels high. As a result, oversupply and low prices are likely to persist in the short term. The next few years will bring intense competition, with steel prices remaining at a low level for the foreseeable future.Painting Roller,Mini Foam Paint Roller,Mini Paint Roller,Microfiber Dynamic Paint Runner Roller
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