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Business / Industry Watch

China steel industry struggles

(Xinhua) Updated: 2015-01-30 09:20

China steel industry struggles

Chinese workers examine coiled steel rods to be shipped abroad at the Port of Lianyungang in Lianyungang, east Chinas Jiangsu province, 20 September 2013. [Photo/IC]

BEIJING - Although China's steelmakers saw a big rise in profits last year, the industry still has overcapacity problems that have dragged prices to record lows.

China's major large and mid-sized steel firms reported 30.4 billion yuan ($5 billion) in profit in 2014, a sharp rise of 40.4 percent, the China Iron and Steel Association (CISA) revealed on Thursday.

The association attributed the growth to lower fuel prices and cost cutting.

Despite the rise, the CISA cautioned that China's economic slowdown and optimized structure is increasingly dampening appetite for steel products, adding more pressure to a sector already struggling with overcapacity. China's economy grew 7.4 percent in 2014, the weakest annual expansion in 24 years.

The CISA asked steelmakers to actively adapt to the changes and transform their business model to foster new profit growth.

In 2014, China produced 823 million tons of crude steel, up 0.9 percent. The China Steel Price Index stood at 83.1 at the end of December, down 16.2 percent year on year.

 

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