China’s large and midsize steelmakers completed only 7.81% of their annual investment plan in the first half 2013 according to the China Iron and Steel Association (CISA). Small-sized companies finished 31.53% of their respective plans.

The steel industry made RMB 303.5bn ($4.97bn) of fixed assets investment in the first half 2013, up 4.26% from a year earlier. This was low compared to the national investmate rate for all businesses of 20.1% and a 17.1% growth rate for the manufacturing sector.

China’s 86 major steelmakers earned about RMB 2.27bn ($3.72M) profits in the first half this year, with the profit margin standing at only 0.13%, almost the lowest among the country’s industrial sectors.
Profits of steel mills in China declined month by month in the first half of this year, the CISA said.

Some 35 out of the 86 large and midsize steelmakers incurred losses in the period, representing 40.7% of them in the red, which was 3.5 percentage points higher than that in the same period of last year.
In June, these 86 major steelmakers together incurred a loss of RMB 699 million, leading the steel sector into a first across-sector loss this year.

The total borrowings from banks of China’s large and midsize steelmakers increased RMB 105.156 billion, or 8.8% from a year earlier, in the six months ending on June 30, according to CISA.

In a breakdown, short-term borrowings increased RMB 112.554 billion, or 13.65% year on year, while long-term borrowings dropped RMB 7.399 billion, or 2% year on year.

By the end of 2012, China’s large and midsize steelmakers had a combined debt ratio of 68.3%, with their total debts at RMB 2.83 trillion, which was seven times that by end of 2001.

Source: China Metals e-mail chinametal@xinhua.org