China's steel industry inventories have dropped 96.7%

As production continues to increase, demand remains low, steel stocks are high, and China's steel industry once again reaches a balance between profit and loss.

"Since this year, affected by the slow recovery of the international economy and the fall in China's economic growth rate, the steel industry continues to show a trend of weak market demand, volatile steel prices, high raw material prices, and declining economic efficiency." China Steel Industry Zhang Changfu, vice president and secretary-general of the association, said that although iron and steel enterprises have taken various measures to reduce costs and increase efficiency, the business situation facing them is still very severe.

On the 16th, Zhang Changfu made the above statement at the "4th China Steel Manufacturing and Logistics Seminar" held in Zhangjiagang, Jiangsu Province.

According to the statistics of the China Iron and Steel Association, from January to April, the key large and medium-sized iron and steel enterprises realized a total sales income of 11,819 billion yuan, a year-on-year decrease of 0.8%, and a taxpayer of 24.5 billion yuan, a year-on-year decrease of 58.1%. Among them, the entire industry realized a profit of 1.15 billion yuan, a decrease of 33.1 billion yuan over the same period last year, a drop of 96.7%.

Zhang Changfu believes that the major cause of large-scale losses for steel companies is that the cost reduction rate is smaller than the price decline rate. For example, in the first quarter, steel prices of large and medium-sized steel companies fell by more than 10% year-on-year and fell by around 500 yuan per ton, while the cost only fell by about 3%, and fell by less than 200 yuan per ton.

In addition, the surge in corporate finance costs has also made iron and steel companies burdensome. According to the data provided by the Ministry of Industry and Information Technology, during the period from January to April this year, the cost of key large and medium-sized steel companies increased by 14% year-on-year, of which management expenses increased by 5%, financial expenses increased by 33.9%, and sales expenses increased by 5.8%. The key large and medium-sized iron and steel enterprises accumulated 27 losses, with a loss of 34%. The loss-making enterprises accumulated a total loss of 10.4 billion yuan, a loss of 10.1 billion yuan over the same period last year, an increase of 32 times.