While Shagang Group, China’s largest private sector steelmaker, saw profits rise 102% year-on-year for the first 10 months of 2014 and Baosteel Group and Aurizon signed a memorandum of understanding (MOU) with the China Development Bank and ANZ Bank to push ahead with resources-based projects, it’s not all good news for the Chinese.
Liuzhou Iron and Steel Company sold 1Mt of steel products in October and earned itself a tidy profit of 216 million yuan (US$35 million), up 129 million yuan (US$21 million) from the same period last year.
While Shagang attributes its profits surge to much lower production costs and less energy usage or resource consumption, Chongqing Iron and Steel Company was forced to sell two subsidiaries and one piece of land for a total of 840 million yuan (US$135.7 million). The Chinese steelmaker has already sold a cold-rolled sheet asset for 350 million yuan (US$56.5 million yuan) and, for the period January to September 2014 has reported a loss of 1.5 billion yuan (US$242 million).
In 2015 demand for Chinese steel products is expected to increase 1.41% year-on-year to about 720Mt, according to the China Metallurgical Industry Planning and Research Institute (MPI).
Source: China Metals.