Steel profit margin

Look from before three quarters, industry of our country iron and steel development is still good. Now the iron and steel industry as a whole in the history of the relatively good period, even the best period. According to CISA statistics, from January to September this year, the operating income of member China steel tube manufacturers was 5.3 trillion yuan, up 42.52 percent year on year. The profit was 319.3 billion yuan, up 1.23 times year-on-year; Sales profit margin was 6.03%, up 2.18 percentage points year-on-year. The “profit benefit” of steel enterprises continued to the third quarter of this year, 46 of which achieved positive net profit growth, an increase of more than 100% of 24, only 2 losses. Although the steel market is good and the operation efficiency is high, the external environment risks are increasing, such as resource security, energy saving and carbon reduction, increasing concentration, and rising labor costs.

In May this year, the price of coke, which is needed for steel production, began to soar after the sharp rise in iron ore prices, largely offsetting the contribution of lower ore prices to costs. In the second half of the year, domestic steel tubing prices rose by three to four times, which put great pressure on the raw fuel costs of the steel industry. In particular, coke resources are in short supply, money is not available to buy, and the price cost of raw fuel required by steel companies has eroded a large part of profits.

According to the CISA monitoring, steel production of rectangular hollow section with the main raw material prices have risen sharply. From January to September, the average price of imported powder ore was 171.67 US dollars/ton, up 72.64% year on year, coking coal price up 57.07% year on year, coke price up 56.88% year on year, scrap price up 36.48% year on year.

Steel prices cannot be unlimited rise, the second half of the steel industry to continue to improve the efficiency of the pressure is increasing. In the fourth quarter, the prices of coal and alloy are still at a high level, and the price of energy media is also rising obviously. The company’s total original fuel cost pressure has increased compared with the third quarter. At the same time, the superposition of production limit, the cost pressure of steel mills is high. Since September, due to the tight power supply, iron and steel enterprises to reduce production, increase production, enterprise costs will increase significantly, the cost pressure of round steel pipe is difficult to change in the short term, the profit level of iron and steel enterprises is facing a downward trend. It is worth noting that, affected by the decline in output, price decline, cost rise and other factors, the profit of steel enterprises fell.