Following the release of their half-year financial results, three leading Chinese steelmakers – Baoshan Iron & Steel Co, Angang Steel Co and Wuhan Iron and Steel Group – are hailing a recovery of the steel market and praising the success of their cost-cutting efforts.

A report by Global Times claims that Baoshan Iron & Steel net profits grew 9.26% year-on-year to 3.5 billion yuan ($524 million). Angang Steel Co was up 93.55% to 300 million yuan and while Wuhan announced reduced profits (down 41.71%) it was an improvement on the company’s Q1 results when profits fell around 93%.

All three steelmakers cut costs to improve profitability and Wuhan accredits rising iron and steel prices for its change in fortune as well as the hard work of its employees.

But the good news is shrouded in misfortune as Ansteel was forced to cut 742 employees during the first six months of 2016 and Baosteel said 93% of its goals were the result of cost-cutting exercises, refusing to elaborate further.

Wuhan trimmed down it’s energy, marketing and management departments.

Despite the cost-cutting, however, the steel market globally is still in a bad way, thanks to oversupply emanating largely from China.

Chinese steelmakers, it is claimed, are over-staffed and the companies are producing uncompetitive products, which is leading to heavy debts.

According to Baosteel, crude steel production in China over the first six months of the year fell 1.1% to 400Mt.

Baosteel and Wuhan are both planning a major restructuring next year.

Source: Global Times.