Posted on 22 Jan 2025
Hunan Valin Steel Co (Valin Steel), the Shenzhen-listed arm of Hunan Steel Group (former Valin Group) headquartered in Central China's Hunan province, predicted a substantial decline of around 55-67% in its net profits for 2024, with the profit value amounting to Yuan 1.7-2.3 billion ($234-316 million), according to the listed company's earnings preannouncement released on January 21.
Valin Steel raked in Yuan 5.1 billion in profits for 2023, the company said. Its parent Hunan Steel Group ranked 14th in global steel production in 2023, according to the statistics from the World Steel Association.
Despite its technical and market strengths as a leading industry player, Valin Steel has also encountered mounting pressures from the broader industry downturn. China's steel industry in 2024 continued its extensive restructuring characterized by high production, elevated costs, increased exports, subdued demand, low prices, and diminished profitability, according to Valin Steel.
The company noted that the domestic steel sector was gripped with a pronounced supply-demand imbalance and widening disparities between production and sales.
Under such circumstances, Valin Steel ramped up efforts in cost reduction, efficiency enhancement, and accelerated transitions toward high-end, intelligent, and environmentally sustainable development and maintained profitability amid broad industry losses.
However, these initiatives were insufficient to offset the adverse effects of evolving industry dynamics fully. In addition, fluctuations in the costs of hot metal due to maintenance works on production lines further impacted the company's on-year business performance, Valin Steel explained.
This profit forecast is an initial estimate from the company's financial department, with detailed data set to be disclosed in Valin Steel's annual report for 2024, the company said.
Source:Mysteel Global
