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Chinese steel companies unveil widely varying profit in 2012

Chinese steel companies unveil widely varying profit in 2012
Issue Time:2013-02-07
  

February06, 2013

Anumber of publicly listed Chinese steel companies took the lead in reportingtheir annual results for 2012, and all of them seemed to their widely varyingprofits or loss well grounded.

Privatelyowned Jiangsu Shagang Group reported sales revenue topped RMB 218bn ($35bn) in2012, up 5% from a year earlier. Exports of its high-grade steel productssurged 74% on year to 3.03Mt.

 

Shagangmanaged to significantly reduce its production costs through integration ofproduction, purchasing and sales. The Shagang Group, headquartered inZhangjiagang City in East China’s Jiangsu province, is the largest privatelyowned steelmaker and mainly produces high-speed wire rod, ribbed steel bar, hot-rolledstrip coil, and wide heavy plate.

 

LiuzhongIron and Steel Co., Ltd (Liugang) reported a RMB 210M ($33.7M) profit for 2012as the company upgraded its operation and production cost control. Turnoverreached RMB 50bn ($8.02M) of revenue for its main business operation last yearamid cross-industry financial difficulties. Liugang invested significantly intechnological upgrading and phasing out obsolete production capacities lastyear in a bid to sharpen the company’s competitive edge in a softening market.

 

Itscoking plant produced 4.1921Mt of coke in 2012, helping Liugang reduce itssteel production cost.

 

XinjiangBayi Iron and Steel Co, however, said its net profit for the year endedDecember 31, 2012 was estimated at RMB 155M ($24.87M), down 67.7% from a yearearlier.

 

ThisShanghai-listed steelmaker had an operating revenue of RMB 26.58bn ($4.26bn) in2012 down 4.88% year on year. The company attributed the profit dip to thesustained sluggish steel prices in the domestic market last year. Bayi Iron andSteel is a subsidiary of the Shanghai-based Baosteel Group.

 

WuhanIron and Steel Group (Wusteel) said it generated a profit of RMB 1.7bn($272.78bn) profit, according to the statement. As part of its going globalstrategy amid surging iron ore cost, Wusteel has been acquiring overseas miningequities since 2009 to cope with the company’s supply of the key steel-makingingredient. It made a profit of RMB 350M ($56.16M) from these overseas miningoperation, contributing over 20% of Wusteel’s total profit in 2012.

 

Wusteel’smining activities started with a joint-venture at the Bloom Lake Mine inQuebec, Canada, and now has mining investment in overseas mining in Madagascar,Canada, Brazil and Libya, with total iron ore reserve reaching 23.2bnt.

 

Source:China Metals e-mail infochn@public.bta.net.cn

 





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