Compared with the “pretty†reports of the two extensions, the days of the Chinese steel industry in 2010 are indeed difficult. “The average ton-steel profit of the iron and steel industry is less than RMB 150.†An authoritative steel official revealed that steel company members with financial statements in 2010 had a total investment income of RMB 1,211.61 billion. The average steel tonnage of steel members after deducting investment income realized profits. Only 149.98 yuan.
“With the high cost of coke and iron ore and the fierce competition in the homogeneity of domestic steel products, the profits of steel have been repeatedly reduced. In 2010, members of the Steel Association have financial statements to produce 51.33 million tons of steel and realize profits. The total amount was 89.407 billion yuan, the average annual profit per ton of steel was 173.49 yuan, and the profit rate of sales revenue was 2.8%, said the above-mentioned sources. He admitted that apart from Baosteel’s total profit of about RMB 23.6 billion and the average profit per ton of steel reaching RMB 637.68, most of the companies are in a state of profit or loss.
The Ministry of Industry and Information Technology recently released the “2010 Steel Industry Operation and Prospects for 2011â€, once again confirming the fact that the iron and steel industry's profit shrinks seriously: From the perspective of the profitability of key large and medium-sized enterprises, the profit rate of sales revenue has declined year after year since 2007, In 2009, they were 7.26%, 3.23%, and 2.46%, respectively. In 2010, it rose slightly to 2.91%, still far below the average level of 6.2% for industrial enterprises across the country. According to the Ministry of Industry and Information Technology, under the dual effect of the high price of raw fuel and the continuous fluctuation of steel prices in 2011, the profit rate of steel industry sales will still be lower than the average level in the industrial sector.
In sharp contrast to the dismal operation of the steel mills, bright reports from “Two Extensions†have emerged. After Rio Tinto, the third-largest mining giant, announced on February 10 that its 2010 full-year net profit increased by 2 times to US$14.3 billion, on the 16th, BHP Billiton, Australia’s largest mining company, also announced its first half of the year from July 1, 2010 to December 31, 2010. Performance, based on the consolidated financial data released by BHP Billiton, BHP Billiton’s full-year net profit for 2010 reached US$17.6 billion, an increase of 71% from the 2009 annual profit of US$10.3 billion.
According to relevant media estimates, BHP Billiton and Liangtuo's net profit in 2010 will reach 31.9 billion US dollars. Among them, the benefits of iron ore can not be overlooked.
"With a strong resource advantage, the cost of two extensions on iron ore may not reach 20 US dollars / ton. Now, ore prices have been close to 200 US dollars / ton, can be calculated, what is the profit of a ton of ore, and Our domestic steel products have sold more than 4,000 bucks, profits have been less than 150 yuan, and we may have losses. Such a strong contrast between upstream and downstream is very unusual,†said a person in charge of a steel plant.