The profit rate of the steel industry in the first half of the year is at the bottom of the national industry

“No worst, only worse” is a portrayal of the survival of many steel companies this year. China Iron and Steel Association recently disclosed that in the first half of the year, the average sales profit rate of large and medium-sized steel enterprises was only 0.13%, which was the bottom in the national industrial industry; among the 86 member companies, there were 35 losses and the loss was 40.7%. At the same time, Li Xinchuang, deputy secretary-general of China Steel Association, warned that if steel production cannot be effectively controlled, many steel companies will face the risk of capital chain breakage.

China Steel Association pointed out that in the first half of the year, the growth of steel demand has slowed down, while domestic crude steel output has increased substantially. The situation of oversupply in the market has not changed. This has caused steel prices to remain low, and iron ore prices have fallen less than steel. The price decline, the production cost of enterprises is high, and the operation is very difficult. Although profits and losses were offset, Dazhong Steel achieved a profit of 2.267 billion yuan, including investment income of 4.321 billion yuan and net non-operating income of 3.88 billion yuan. After deducting these factors, the steel industry still suffered a large loss. In particular, in June, due to the sharp fall in steel prices, member companies had a total loss of 699 million yuan, which was the first industry loss this year.

“From the perspective of realizing profits this month, it has been decreasing month by month. At the same time, the number of loss-making enterprises has increased significantly, and the loss has increased by 3.5 percentage points over the same period of last year.” Zhang Changfu, vice president and secretary-general of China Iron and Steel Association, said frankly, “This situation reminds us. The production and operation status of many enterprises this year is even more difficult than the same period last year."

China Steel Association analyzed that in the second half of this year, enterprises are likely to encounter financial difficulties. At the end of June, the loans of key steel enterprises increased by 105.156 billion yuan, an increase of 8.8%, of which short-term loans increased by 112.555 billion yuan, an increase of 13.65%. Accounts receivable and accounts payable increased year-on-year, of which accounts receivable increased by 1.962 billion yuan and accounts payable increased by 21.43 billion yuan.