Steel production and sales have resumed to normal and operated stably by May, while the profit of China's steel industry slumped sharply over January-May amid double squeezes from falling steel prices and rising imported iron ore prices, showed data from the Ministry of Industry and Information Technology (MIIT) released on July 3.
The profit of ferrous metallurgy and rolling processing industry slid sharply by 50.6% year on year to 18.70 billion yuan ($2.65 billion) in May, with the operating income reaching 604.65 billion yuan, a year-on-year decrease of 0.9%.
From January to May, ferrous metallurgy and rolling processing industry realized a total profit of 49.33 billion yuan, down 57.2% year on year, with the operating income reaching 2.55 trillion yuan, down 6.0% year on year.
Steel output kept high. According to data from the National Bureau of Statistics (NBS), output of pig iron, crude steel and steel products reached 77.32 million, 92.27 million and 114.53 million tonnes in May, up by 2.4%, 4.2% and 6.2% year on year respectively.
China produced 360 million, 410 million and 490 million tonnes of pig iron, crude steel and steel products from January to May, a year-on-year growth of 1.5%, 1.9% and 1.2% respectively.
Steel prices fell continuously. China's steel price index averaged 99.8 points in May, down 10.8% from a year ago. The index contracted 8.3% from the previous year to 100.3 points during January-May, compared with a reduction of 5.7% in the first quarter.
Steel stocks of key steel mills in China totaled 13.28 million tonnes in late May, a decrease of 8.13 million tonnes or 38.0% from the peak in early March, according to the statistics of China Iron and Steel Association.
The stocks of five major steel varieties - rebar, steel wires, HRC, medium plates and CRC- hit 13.12 million tonnes in 20 cities, a decrease of 7.09 million tonnes or 35.1% from the peak in early March, falling for eight successive sessions from early March.
Steel exports remained under headwinds. According to statistics from the General Administration of Customs, China exported 4.40 million tonnes of steel products totally in May, tumbling by 23.4% on the year. Steel imports were 1.28 million tonnes, an increase of 30.3% year on year.
From January to May, the cumulative steel exports reached 25.0 million tonnes, down 14.0% year on year, and imports were 5.46 million tonnes, up 12.0% year on year.
Iron ore prices continued climbing up. In May, China's average composite iron ore price index was 335.6 points, an increase of 8.6% month on month, of which the average imported iron ore price index was 339.0 points, growing by 10.1% from a month ago.
From January to May, the index averaged 325.2 points, an increase of 4.3% year on year, of which the average imported iron ore price index was 326.3 points, an increase of 2.0% year on year.
Surprisingly, the ferrous metal mining and processing industry has achieved favorable performance during January-May, with the total profit reaching 10.18 billion yuan, an increase of 20.9% year on year. The growth expanded 68.7 percentage points from the first quarter, according to data from the NBS.
(Writing by Shengnan Liu Editing by Jessie Jia)
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