It is reported that Domestic steel giants WISCO and Angang issued semi annual performance result, showing uneven development in H1 of the year despite both of them bore pressures of rising raw material costs.

Semi-annual performance report shows that WISCO earned net profit of CNY 1.226 billion up by 14.73%YoY with earnings per share at CNY 0.125 up by 11.61%YoY. Sales revenue of WISCO in H1 of the year was CNY 50.822 billion up by 23.22%Yoy with output of iron, steel and finished steel in Qingshan plant was 8.4748, 8.879 and 8.289 million tonnes up by 10.98%YoY, 10.45%YoY and 13.57%YoY.

Despite sales revenue and profit saw YoY rise, gross profit margin witnessed a decline due to rising raw material and sales costs. For outlook in H2 of the year, WISICO believed that production and operation are facing heavy pressures as steel industry is running under high output high cost and low profit.

Mr Liu Yuanrui analyst of Changjiang Securities estimated that Angang may eye a rise of 10% in its iron ore purchase as its purchasing model is from Group based on average CIF price of last year enjoying a discount of 5%.

It is worth mentioning that before Angang all of Magang, Liugang and Shagang saw profit drop as monthly pricing mechanism of iron ore eroded profitability of steelmakers. At the same time, coking coal and scrap are running at high level, curbing profitability of steel mills.

(Sourced from MySteel.net)
Visit www.Mysteel.net for real time access to China steel new