Posted on 22 Aug 2024
Jiangsu Shagang Co. (Shagang), the Shenzhen-listed arm of China's largest privately-owned steelmaker, Shagang Group, reported an 11.8% on-year decline in net profits for the first half of this year, reaching Yuan 104 million ($14.6 million), according to its semi-annual report released on Wednesday.
"The domestic steel industry is currently facing a situation of high production, high costs, low prices, and low profitability," stated Shagang, headquartered in Zhangjiagang in East China's Jiangsu province. The sector is struggling with widespread margin losses due to the dual pressures of demand and supply, the steel giant emphasized.
Shagang's analysis aligns with data from the National Bureau of Statistics, which showed that Chinese steelmakers experienced a total loss of Yuan 310 million in the January-June period, a staggering 156.4% drop from the previous year, as Mysteel Global reported.
Primarily responsible for this downturn was the significant decline in domestic steel prices during the first half. For example, the national price of HRB400E 20mm dia rebar plunged by Yuan 448/t from the end of 2023 to settle at Yuan 3,626/t and including the 13% VAT as of June 28, according to Mysteel's assessment.
In the first six months, Shagang's business revenue added up to Yuan 7.7 billion, marking a slight 0.8% on-year dip, according to the report.
Shagang did not disclose any relevant data regarding its steel production for the first half of the year, Mysteel Global notes.
Last year, Shagang Group produced 40.5 million tonnes of crude steel, ranking fourth in China and sixth globally in terms of production volume, according to statistics from the World Steel Association.
In contrast to Shagang, which remains profitable, its industry counterpart Angang Steel Co., the listed arm of China's second-largest steelmaker Ansteel Iron & Steel Group, suffered a Yuan 2.68 billion loss in the first six months, as reported.
Source:Mysteel Global
