A number of publicly listed Chinese steel companies took the lead in reporting their annual results for 2012, and all of them seemed to their widely varying profits or loss well grounded.
Privately owned Jiangsu Shagang Group reported sales revenue topped RMB 218bn ($35bn) in 2012, up 5% from a year earlier. Exports of its high-grade steel products surged 74% on year to 3.03Mt.
Shagang managed to significantly reduce its production costs through integration of production, purchasing and sales. The Shagang Group, headquartered in Zhangjiagang City in East China’s Jiangsu province, is the largest privately owned steelmaker and mainly produces high-speed wire rod, ribbed steel bar, hot-rolled strip coil, and wide heavy plate.
Liuzhong Iron and Steel Co., Ltd (Liugang) reported a RMB 210M ($33.7M) profit for 2012 as the company upgraded its operation and production cost control. Turnover reached RMB 50bn ($8.02M) of revenue for its main business operation last year amid cross-industry financial difficulties. Liugang invested significantly in technological upgrading and phasing out obsolete production capacities last year in a bid to sharpen the company’s competitive edge in a softening market.
Its coking plant produced 4.1921Mt of coke in 2012, helping Liugang reduce its steel production cost.
Xinjiang Bayi Iron and Steel Co, however, said its net profit for the year ended December 31, 2012 was estimated at RMB 155M ($24.87M), down 67.7% from a year earlier.
This Shanghai-listed steelmaker had an operating revenue of RMB 26.58bn ($4.26bn) in 2012 down 4.88% year on year. The company attributed the profit dip to the sustained sluggish steel prices in the domestic market last year. Bayi Iron and Steel is a subsidiary of the Shanghai-based Baosteel Group.
Wuhan Iron and Steel Group (Wusteel) said it generated a profit of RMB 1.7bn ($272.78bn) profit, according to the statement. As part of its going global strategy amid surging iron ore cost, Wusteel has been acquiring overseas mining equities since 2009 to cope with the company’s supply of the key steel-making ingredient. It made a profit of RMB 350M ($56.16M) from these overseas mining operation, contributing over 20% of Wusteel’s total profit in 2012.
Wusteel’s mining activities started with a joint-venture at the Bloom Lake Mine in Quebec, Canada, and now has mining investment in overseas mining in Madagascar, Canada, Brazil and Libya, with total iron ore reserve reaching 23.2bnt.
Source: China Metals e-mail email@example.com