The Profitability of Steelmakers Based in China's Hebei Province Remained Low in 2013

The profitability of steelmakers based in China's Hebei Province remained low in 2013, with 16 percent of key steel companies in the province suffering losses, according to media reports citing the recent 2014 board meeting of the Hebei Metallurgical Industry Association (HBMIA).

China's steel industry underwent a difficult period in 2013 and Hebei Province, the biggest steel producing province in the country, faced a severe situation due to high output, high costs, low prices and poor profitability.

Hebei achieved an overall profit of RMB 16.35 billion ($2.66 billion) in the steel sector in 2013, up 29.09 percent year on year. The profit for one metric ton of steel products produced in Hebei last year was RMB 86.77/mt ($14.1/mt) versus RMB 36.41/mt ($6/mt) profit recorded by China's 86 key steel companies monitored by the China Iron and Steel Association (CISA), said Wang Dayong, secretary general of the HBMIA.

Mr. Wang also said that steelmakers in the province strived to develop markets at home and abroad in 2013. Data showed that in 2013 Hebei's steel product exports amounted to 14.35 million mt, reaching a record high, up 33.6 percent compared to 2012. The export value amounted to $9.46 billion, increasing by 17.06 percent year on year.

However, Mr. Wang added that Hebei ranked first in terms of steel product export volumes from Chinese provinces in 2013, but its overall steel product export value ranked second. In addition, the average export price of steel products from Hebei Province was only $659.20/mt in 2013, $197.17/mt lower than the national average of $856.37/mt in the given year.