Posted on 25 Aug 2023
Jiangsu Shagang Co (Shagang), the Shenzhen-listed arm of China's leading privately-owned steelmaker Shagang Group and headquartered in East China's Jiangsu province, posted a 70.5% on-year tumble in its net profits during the first half of 2023 to reach Yuan 106 million ($14.6 million), according to the company's interim report released on Thursday.
The steel giant cited the weakening demand from end-users, falling finished steel prices and persisting high raw materials prices for the sharp decline in its profitability for H1, according to the release.
"Although China has implemented a series of policies and follow-up measures to stabilize the economic growth, the domestic steel market remained weak and the profitability of steelmakers fell significantly (in the first half) compared with the same period last year," the company said.
In tandem, the total business revenue achieved by Shagang during H1 came in at around Yuan 7.6 billion, or having decreased by 21.6% on year, the report found.
The official data from China's National Bureau of Statistics showed that steelmakers and fabricators in the country saw their combined profits plunge by 97.6% on year to Yuan 1.9 billion over the first six months, as reported.
Through the course of this year's first half, China's steel prices had initially trended upwards and then fell back and witnessed steeper declines. The country's national price of HRB400E 20mm dia rebar, a barometer of the domestic steel market sentiment, was assessed by Mysteel at Yuan 3,855/tonne including the 13% VAT as of June 30, slumping by a total of Yuan 309/t from the end of 2022.
As for imported iron ore prices, Mysteel SEADEX 62% Australian Fines, for example, only inched down by $5.15/dmt to $112.15/dmt CFR Qingdao over the same period, still at a relatively high level.
Source:Mysteel Global
