Profit of Chinese iron and steel enterprises fell by more than 30%

China's steel production and demand have maintained a certain growth since this year, but the benefits of iron and steel enterprises have declined due to a significant increase in costs, the China Iron and Steel Industry Association said Tuesday. In the first three quarters, the total profit of iron and steel enterprises dropped by more than 30% year on year. He Wenbo, executive vice president of China Iron and Steel Industry Association, told reporters in Beijing on the 29th that in the first three quarters of this year, the manufacturing cost of iron and steel industry increased significantly and the enterprise benefit decreased significantly. From January to September, the sales revenue of member enterprises was 3.18 trillion yuan (RMB, the same below), up 11.6% year-on-year; the total profit was 146.6 billion yuan, down 32% year-on-year; the sales profit rate was 4.6%, down 3% year-on-year. According to the data from January to September this year, the output of crude steel in China was 748 million tons, up 8.4% year on year; the output of pig iron was 612 million tons, up 6.3% year on year; the output of steel (including repetitive materials) was 909 million tons, up 10.6% year on year. Since this year, the prices of domestic iron ore concentrate, imported iron ore, scrap steel, coking coal and other main raw materials have generally increased, and continue to run at a high level. From January to September, compared with the same period last year, the purchase cost of main raw materials increased by 31.7% for imported iron ore, 21.5% for domestic iron concentrate and 8.8% for scrap steel. According to the short-term forecast issued by the World Steel Association (WSA) in October, the global steel demand will increase by 3.9% in 2019, and the growth rate will drop by 0.7 percentage points compared with the previous year. It is predicted that the global steel demand will only increase by 1.7% in 2020. He Wenbo said that the iron and steel industry should continue to work hard to reduce costs and increase efficiency. We should make good use of the tax reduction and fee reduction measures introduced by the state. We will continue to deepen benchmarking and tap potential, and vigorously reduce production costs, especially purchasing costs. At the same time, we should actively develop the market, optimize the variety structure, increase the added value of products, and improve the efficiency by increasing income.