Chinese steelmakers slip, post Q1 losses

Waning demand and rising production costs have brought China's steelmaking industry to face a quarterly profit loss for the first time in a decade, China Iron and Steel Association (CISA) said here Wednesday.

Chinese steelmakers saw a loss of 1.034 billion yuan (164.1 million U.S.dollars) in the first three months of this year, marking the first time the entire industry has seen a profit loss since 2000, said Zhang Changfu, deputy head of the CISA.

Squeezed by increased costs and declining prices, nearly one-third of Chinese steelmakers reported losses in the first quarter, according to Zhang.

For major steel mills, profits and taxes totalled 15.18 billion yuan in the first quarter, down 64.83 percent year on year, and the sales volume fell 0.95 percent to 863.89 billion yuan in the same period, said Zhang.

Major steelmakers' industrial output totalled 785.07 billion yuan in the three-month period, up 0.24 percent from a year ago, he said.

Meanwhile, China's steel production has continued to rise, but at a slower pace. In the first quarter, Chinese steelmakers produced a total of 165.92 million tonnes of cast iron, 174.22 million tonnes of crude steel and 222.46 million tonnes of steel, up 3.2 percent, 2.5 percent and 6.5 percent year on year, respectively.

But Zhang said major steel mills' monthly profits were picking up as they gained 2.08 billion yuan in March, and the industry is struggling to return to a profitable level in the first half.