A worker is seen at a plant of Ansteel Group Co., Ltd. in Anshan, northeast China's Liaoning Province, July 5, 2019. (Xinhua/Pan Yulong)
BEIJING, June 28 (Xinhua) -- Steel companies listed on China's A-share market are expected to achieve good results in the first half of the year, thanks to the robust demand from downstream sectors amid the domestic economic recovery, the Xinhua-run Economic Information Daily reported on Monday.
Up to now, nine of the 36 listed steel companies in the A-share market have released their performance forecasts for the first half of the year, eight of which have forecast increases in net profits.
Industry insiders note that since the beginning of this year, China's economy has continued to recover steadily, and the domestic steel market has been booming in production and sales. Under such circumstances, the steel companies are likely to significantly improve their profitability.
On June 26, Nanjing Iron & Steel Co., Ltd. (600282.SH) announced that its net profit in the first half of the year is expected to be approximately 2.26 billion yuan, a year-on-year increase of about 102.67 percent.
Angang Steel Company Limited (000898.SZ) expected its net profit in the first half to be about 4.8 billion yuan in the first half of the year, surging about 860 percent year on year.
Jiangsu Shagang Co., Ltd. (002075.SZ) is expected to achieve a net profit of 360 million yuan to 540 million yuan in the first half of the year, a year-on-year jump of 42.69 percent to 114.04 percent.
CITIC Pacific Special Steel Group Co., Ltd. (000708.SZ) expected its net profit to be in a range from 4.13 billion yuan to 4.23 billion yuan in the first half of the year, a year-on-year increase of 50.24 percent to 53.87 percent.
Some institutions believe that this year, thanks to the increase in operating rate of the downstream real estate and infrastructure projects, the demand for steel products has driven the production and sales of listed steel companies. In addition, under the background of booming supply and demand, steel prices have continued to stay high and profit for producing one tonne of steel is at a relatively high level.
However, since mid-June, the domestic steel spot market has witnessed a continuous decline.
According to data from Lgmi.com, a steel information provider, as of June 24, the national average spot price of grade 3 rebar was 4,880 yuan/tonne, down 242 yuan/tonne from mid-June and that of the hot-rolled coils was 5,340 yuan/tonne, down 212 yuan/tonne from mid-June.
Luo Tiejun, vice president of the China Iron and Steel Association (CISA), has recently said that the current downstream demand in the steel market is showing new changes, but overall, the domestic steel consumption this year will be generally increasing. (Edited by Hu Pingchao with Xinhua Silk Road, hupingchao@xinhua.org)
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