Listed Chinese steel firms have turned losses into profit, showed their half-year performance reports, following huge losses last year.
The favorable turn was mainly benefited from the upturn in both steel prices and sales amid notable effects of the de-capacity policy, as well as their efforts in cutting costs in the first half of this year.
Of the 17 key steel firms that have released their half-year reports, only three firms were in deficit.
It was reported that Jiugang Hongxing, a big loss-maker last year, has turned into profit in the first half, while Ansteel’s profit nearly doubled compared with the same period last year.
Jiugang Hongxing earned almost 500 million yuan ($74.9 million) in the second quarter this year and made the net profit of 227 million yuan for the first half, following a loss of 270 million yuan in the first quarter and 7.4 billion yuan loss last year.
Ansteel reported a net profit of 300 million yuan in first half year, with net profit of 915 million yuan in the second quarter, up 93.55% year on year.
Jiangsu-based Shagang Group increased its anticipation of net profit from 15-25 million yuan to 50-75 million yuan for the first half of the year. It posted a surge of about 8 to 13 times in the second quarter’s net profit, compared with net profit of 5.46 million yuan in the first quarter.
With increasing steel prices, many steel mills have turned loss into profit since March. Data from China Iron and Steel Association showed, China's key steel mills reported net profit of 2.745 billion yuan in March, 8.383 billion yuan in April and 8.522 billion yuan in May.
Over January-May, total net profit of key steel mills stood at 8.736 billion yuan, up 738% on year. The deficit firms accounting for 28.28% of the total, down from 41.41% the same period last year, showed the CISA data.
(Writing by Jun Chang Editing by Harry Huo)
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