In the January-May period of this year, the aggregate gross profit of 65 major steel enterprises in China's Hebei Province totaled RMB 239 million ($39 million), down 91.5 percent compared to RMB 2.817 billion in the same period of last year, as announced by the Hebei Metallurgical Industry Association.
Meanwhile, in May alone, the aggregate net loss of the 65 steel enterprises in question totaled RMB 99 million ($16 million), compared to an aggregate gross profit of RMB 126 million ($20 million) in April.
In particular, in the first five months of this year, 41 of the 65 major steel enterprises in Hebei posted year-on-year decreases in their gross profit, while the remaining 24 enterprises saw increases in their gross profit on year-on-year basis. Of the 41 enterprises, 12 steel enterprises witnessed year-on-year decreases exceeding 100 percent, 11 steel enterprises witnessed year-on-year decreases between 80 percent and 100 percent, and 12 steel enterprises witnessed year-on-year decreases between 35 percent and 80 percent.
The main reasons for the weak situation in the Chinese steel sector are still overcapacity and low profitability, according to Wang Dayong, secretary-general of Hebei Metallurgical Industry Association.
