Chinese crude steel output rose 9.1% from a year earlier in Q1 2013 to 191.89Mt, iron output expanded 7.6% to 178.23Mt, and rolled steel output jumped 12.3% in the period.

The average daily crude steel output reached a record-high of 2.13Mt. “The figures have exposed many problems facing the steel sector,” executive vice president of the CISA Zhu Jimin said, pointing to worsening oversupply in the market, rising stockpiles and more trade friction cases with foreign countries.

The growth of crude steel output was 6.6% higher than a year earlier, and that of steel products 5.8% higher. During the period, China imported 186.48Mt of iron ores, unchanged from a year earlier, while it exported 14.43Mt of steel products, up 18.8%.
The debt-to-asset ratio of China’s steel industry continued to rise in Q1 2013 and the sector is facing significant pressure from overcapacity, costs, as well as relatively low prices of downstream steel products. By the end of the first quarter, 44 listed steel companies saw the average debt ratio increase to 61.52% compared with 60.35% at the end of 2012.

In the first quarter of this year, the number of listed companies incurring losses fell to 9 from 14, but a third of the listed steel companies witnessed a rise in their debt ratios, while over 70% had a debt ratio of more than 50%.

Steel prices fell marginally in the first quarter. The complex steel price index averaged 107.99 in March, down 1.72 from February, and continued to drop in the most part of April. The latest reports said Baosteel, which maintained its ex-plant price unchanged for the booking in May, has decided to lower its benchmark price for June bookings.

Source: China Metals e-mail