context: Due to high demand and prices, steel companies made handsome profits in the first half of 2018. Annual figures show a continuation of this trend, despite price drops in November and December 2018. However, November and December data suggest steel prices may slide in 2019.
In 2018, the steel industry realised profit of C¥470.4 bn, up 39.3 percent y-o-y according to National Development and Reform Commission Bureau of Economic Operations Adjustment. Major steel producers also released their annual reports. The three most profitable firms are Baosteel (C¥20 bn), Ansteel (C¥7.8 bn) and Valin (C¥6.63 bn). Steel profits this year are largely the result of supply-side reform, notes Economic Observer.
930 million tonnes of crude steel were produced in 2018, up 6.6 percent y-o-y according to National Bureau of Statistics. Yuyong 于勇 China Steel and Iron Association president says the increase is a result of
- filling in the gap left by elimination of sub-standard steel
- increased demand
- release of advanced capacity
Zhongtai Securities forecasts industry stabilisation in 2019 after high 2018 profits.