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Profits in the Chinese Steel Industry Grew at a Lower Rate Despite Output Increasing

Posted on: Friday, 26 January 2007, 03:00 CST

Research and Markets (http://www.researchandmarkets.com/reports/c49213) has announced the addition of China Steel Market Report, 2006-2008 to their offering

Chinas steel output reached 349.36 million tons in 2005, up by 24.6% over the year of 2004. The output of crude steel and steel products reached 199.4696 million tons and 221.9518 million tons respectively in the first half of 2006, up by 18.3% and 25.8% separately over the same period of last year. From the year 2005 to the first half of 2006, the overall technology of the steel industry has been greatly improved, product structure has been constantly optimized and, import & export kept basically balanced. The internal structures of enterprises have been further adjusted, industrial concentration has been advanced and, international competitiveness has been enhanced. The profits, however, grew at a lower rate. Furthermore, the price also experienced a wild fluctuation in 2005: it set the highest record in the first quarter but began slipping due to a sharp rise in domestic newly-added resources and then dived in the fourth quarter.

China's steel industry is now going to turn from a rapid growth into a slower but steadier stage. As macro-economy has slowed down since early 2006, the overall domestic production capacity shows a sign of supply exceeding demand by stages, which is featured by that high-end products are short of supply but low-end ones are in overproduction, i.e. construction steels like wiring steel, screw-thread steel and bar steel achieved self-support at more than 100% while that only reached about 60% in electric steel, coated sheet and cold-flat rolled steel sheet market.

It is no doubt that the policies on China steel industry play an important role for the healthy development as well as for the investment in the field. Moreover, the encouraging policies of merger and acquisition among steel firms also stimulate the development of China steel industry, but the notion of making larger doesn't mean being stronger must be kept in mind.

It is possible that multi-aspects, regional and complementary industrial structure will appear in Chinas steel industry thanks to the geographic distribution. Small-scale listed steel companies will face a grim challenge during the integration, but steel industry will still develop towards acquisition & reorganization during the 11th Five-year Plan period. Industrial policies released by Chinese government indicate that some steel enterprises with production capacity below 5 million tons are likely to be invested domestically, yet they may fail to make sound achievement under the pressure of fierce competition; while steel giants can grow larger and stronger through acquisition & reorganization. Therefore, they will eventually control the market though there is a long road to go.

Topics Covered

1 Analysis of China steel industry

2 Industrial analysis of China steel industry from 2003 to 2005

3 Analysis of China steel market

4 Steel price trends in China

5 Construction steel

6 Steel products for automobile

7 Stainless steel

8 Steel tube

9 Steel sheet

10 Others

11 Output of steel products from 2003 to 2005

12 Import and export of steel products

13 Steel furnace charge market

14 Marketing analysis of China steel enterprises

15 Major steel products manufacturers

16 Competitiveness analysis of steel industry

17 Investment in China steel industry

18 Prospect and forecast of steel industry

List of Charts

Companies Mentioned

-- Baosteel Group

-- Wuhan Iron and Steel (Group) Corp

-- Shougang Group

-- Hansteel Group

-- Nanjing Iron & Steel Co., Ltd

For more information visit http://www.researchandmarkets.com/reports/c49213

Source: Business Wire

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