In the first half of the current year, China's total crude steel output was 390 million mt, up 7.4 percent year on year, according to a report on overall Chinese industry in the given period released by China's Ministry of Industry and Information Technology (MIIT). In the first half of the year, the average daily crude steel output in China amounted to 2.15 million mt, while China's total crude steel output in 2013 is expected to reach 790 million mt.
As the end of June, total finished steel inventory in the main Chinese steel markets was 15.46 million mt, down 6.7 percent compared to the end of May. Although inventory had witnessed month-on-month decreases for three straight months, finished steel inventory at the end of June was still 30.2 percent higher than at the beginning of the current year.
China's composite steel price index issued by the China Iron and Steel Association (CISA) was at 98.5 points as of the end of June, compared to 111.1 points at the end of February. Sharp decreases in the index were witnessed in May, followed by slower decreases in June.
In the first half of the current year, the total gross profits of the 77 member enterprises of the CISA amounted to RMB 2.27 billion, up 30.4 percent year on year. The gross profit to sales ratio for the given period was only 0.13 percent. The gross profits of the companies in question amounted to RMB 270 million ($44 million), 150 million ($24 million) and 150 million ($24 million) respectively in March, April and May, while the companies recorded an aggregate net loss of RMB 700 million ($113 million) in June.
As stated by the MIIT, in the second half of this year China's steel exporters still face further challenges due to global steel overcapacity and increased trade friction. Meanwhile, the imbalance between supply and demand in the Chinese domestic steel market still exists because of the higher daily crude steel output and higher finished steel inventory. Chinese steel enterprises also face production cost pressures.
