According to my steel (Mysteel) incomplete statistics, as of August 28, there are 22 listed steel companies announced the first half of 2023 performance report, a total net profit of about 8.752 billion yuan, but year-on-year, only 6 steel companies net profit rose year-on-year, most listed steel companies profit compared to last year fell significantly.
"The game between strong expectations and weak reality" is the main contradiction that has dominated the steel market in the past year. It is under this contradiction that the domestic steel industry faces problems such as insufficient recovery of traditional market demand, high original fuel prices, and declining industry profitability.
"In 2022, the efficiency of the steel industry declined significantly, and the profit of the ferrous metal smelting and rolling processing industry fell by 91.3% year-on-year. The steel industry is still facing overall downward pressure in 2023."
As of 2023, the average profit of rebar long process steel enterprises is -11.24 yuan/ton, compared with the average profit of 74.2 yuan/ton in 2022, and the value reached 527 yuan/ton in 2021. "In the past two years, steel sales profits declined faster, and the lowest profit in 2023 was a loss of 165.27 yuan/ton." The steel industry is generally in a state of loss."
Weak demand performance and high raw fuel prices are the main reasons for this situation.
According to CISA data, in the first half of 2023, China's apparent consumption of crude steel fell by 1.9% year-on-year, but domestic crude steel production increased by 1.3% year-on-year in the same period. The overall pattern of supply is strong and weak. And it is expected that the overall steel consumption in 2023 will have a slight downward trend. In contrast, affected by the year-on-year increase in crude steel production and the maintenance of high daily output of molten iron, the supply and demand pattern of raw steel fuel is stronger than that of finished materials, and in the context of weak demand in the steel industry, the cost side did not boost steel prices, but led to a significant decline in the sales profit of finished materials. Among the 16 listed steel enterprises whose semi-annual net profit declined, the profit of five steel enterprises, including Zhongnan Shares, Hangzhou Steel shares, New Steel shares, Shougang shares and Shagang shares, declined by more than 70% year-on-year, of which Hangzhou Steel shares and Zhongnan shares net profit declined by close to or even more than 90%.
