The China Iron and Steel Association (CISA) has stated that in the January-March period of this year the aggregate gross profits of large and medium-sized steel enterprises in China totaled RMB 2.486 billion ($400 million), compared to the overall net loss recorded in the same period last year. In the first quarter this year, the total sales revenues of the steel enterprises in question amounted to RMB 8.7585 trillion ($1.4 trillion), up 0.94 percent year on year.
However, the overall gross profit of large and medium-sized steel enterprises in China in January, February and March this year respectively amounted to RMB1.338 billion ($215 million), RMB 998 million ($161 million), and RMB 267 million ($43 million), indicating a downtrend.
In the first quarter, 34.9 percent of the companies in question still posted losses.
According to the CISA, as of the end of March the total finished steel inventory of arge and medium-sized steel enterprises in China was 14.83 million mt, up 47.4 percent or 4.77 million mt compared to 10.06 million mt at the start of the first quarter.
Due to the decrease in prices in the finished steel market, most Chinese steel enterprises were forced to reduce the ex-mill prices of their products for May shipment.
Meanwhile, China's import price of iron ore was $124.19/mt at the beginning of this year, increasing to $158.54/mt by the middle of February. Though declining in March, China's import price of iron ore increased again in April. So far, China's import price of iron ore has increased by $20-30/mt compared to the beginning of this year, much higher than the increase margin for finished steel price.
