China's listed steel companies posted a net profit of 5.85 billion yuan ($960 million) in the first three quarters, reversing an industry-wide loss from a year earlier, China Securities Journal reported over the weekend.
A total of 33 listed Chinese steel companies that have issued third quarter reports made a combined profit of 5.85 billion yuan in the nine months of the year, compared with a loss of 3.29 billion yuan in the same period of last year, China Securities Journal reported Saturday, citing data from Wind Information Co, a financial data service provider.
Of the 33 listed steel companies, eight had reduced losses, the report said.
"Last year was the worst year for China's steel industry. Even in the first half of the year, major steel companies were striving to make both ends meet," Wang Guoqing, a senior analyst with Beijing Lange Steel Information Research Center told the Global Times Sunday.
"But the industry reversed the situation and posted the best performance of the year in July and August as the government's policy to stabilize the economy took effect. The good results in the third quarter helped drive up the whole-year profits so far," Wang said.
Wind's data came after China Iron and Steel Association (CISA) said late October that a total of 86 major steel makers posted a profit of 11.3 billion yuan in the first three quarters, reversing a loss of 6 billion yuan in the same period of last year and increasing their profit margin by 0.64 percentage points.
In September alone, they made a profit of 3.3 billion yuan, with profit margin reaching 1.07 percent, CISA said. However, the profit margin of the 86 major steel makers was only 0.13 percent in the first half of the year.
If the major steel makers could maintain strong profitability in the remaining months of the year as they did in July and August, they are expected to achieve a profit of 20 billion yuan for the year, Wang Xiaoqi, a deputy head of CISA, said in September.
"Steel companies have certainly had a better time this year than last year because raw material costs have risen slower than the steel price. But it's too early to say that the steel industry has completely recovered from the slump," Qu Xiuli, a deputy secretary-general at the CISA, told the Global Times Sunday.
"The steel industry needs to take advantage of the opportunities arising from the reforms after the Third Plenary Session of the 18th Central Committee of Communist Party of China to upgrade industrial structure and give priority to supporting development of information and new energy industries," Wang from CISA said.
