Profits of China's steel mills close to 22 bln yuan in Q1
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China's 77 major steel mills saw combined profits of 21.77 billion yuan (3.19 billion U.S. dollars) in the first quarter, the vice chairman of the China Iron and Steel Association (CISA) said Wednesday.
Last year's loss of 2.54 billion yuan for the same period exaggerated the year-on-year figure though. Compared to the fourth quarter last year profits were down from 25.41 billion yuan, Luo Bingsheng told reporters at a news briefing.
Combined business revenue totalled 669.5 billion yuan in the first quarter, up 42.54 percent year on year.
Luo said the profitability of steel makers was still low in the first quarter because of rising costs of raw materials, including iron ore and coke.
Luo cited increasing costs as one of the factors that put Chinese steel mills under "tremendous pressure."
Excessive steel output was also a big concern to the CISA, as Chinese steel mills produced 15.80 million tonnes of crude steel in the first three months, up 24.52 percent year on year.
Luo said the figure was "still evidently too high." Along with 10 million tonnes of steel in stockpile currently, the total market supply far exceeded demand, he said.
Luo also warned that increased investment in the sector's fixed assets would boost capacity and worsen overcapacity.
The CISA data showed that in the first quarter, fixed asset investment in steel industry stood at 618 million yuan, up 22.7 percent from a year earlier.
