Steel industry earnings support

The average price of imported iron ore in August was $207.59 per ton, according to the General Administration of Customs. The average price of imported iron ore from January to August was $178.25 / ton. In August, imported black steel pipe 1.063 million tons, down 52.5% year on year, up 1.3% month on month; From January to August, the total imported steel was 9.46 million tons, down 22.4% year on year. The average price of imported steel in August was $1440.73 / ton, and the average export price exceeded the import price by $3.1 / ton.

In the first half of this year, iron ore prices soared, causing some impact on the performance of related listed companies. Many steel listed companies pointed out in the semi-annual report with the gradual easing of the epidemic, the accelerated recovery of the global economy, the rapid growth of China’s economy, the strong demand for steel market, steel prices continue to rise, it will bring rare development opportunities for steel pipe manufacturers. But at the same time, iron ore, coking coal and other bulk raw fuel prices skyrocketed, steel companies increased cost pressure.

Fushun Special Steel disclosed that the company’s main raw material is scrap steel, but iron ore price changes may cause scrap price changes. The Company calculates the change of the product cost according to the change of the purchase price of raw and auxiliary materials. If the change is large, it will suggest the sales department to negotiate with the customer to adjust the price. In terms of round steel pipe production, global crude steel production peaked in May, while Chinese steel mills significantly limited production. In the later period, the increase in iron ore demand caused by overseas steel mills is limited, and cannot offset the reduction in iron ore demand caused by the production limit of Chinese steel mills. Looking forward to September, the steel market will usher in peak demand season, but the crude steel production in various regions is further tightened, which may continue to reduce production, iron ore demand continues to be weak operation.

Angang pointed out that China’s economy is expected to continue to strengthen and improve in the second half of the year. Due to the “double carbon” target requirements, supply-side reform and other factors, the steel supply of square steel pipe is tight. While the downstream industry demand is weakening, the profitability of the steel industry is uncertain.