Chinese steelmakers are showing unprecedented interest in non-steel activities to cope with the challenge of low profits amid a downturn.
Non-steel business turnover of China’s seven largest steelmakers each with an annual capacity of over 20Mt accounted for 23% of the companies’ total revenues in the first half of the year. The figure was revealed at a conference on non-steel businesses of the Chinese iron and steel industry, held in Beijing at the end of August.
CISA figures showed that combined sales revenue of 86 member companies of the association totalled RMB 1.8tr ($289.8bn) in the first half of the year, up 0.94% from the same period in 2012 but profits totalled RMB 2.27bn ($365.5M), with a profit margin of just 0.13%.
In 2012, the profit margin of China’s large- and medium-sized iron and steel enterprises stood at 0.04%. This is in sharp contrast with the average profit margin of 3.5% to 6% in the non-steel sector.
Source: China Metals e-mail chinametal@xinhua.org
