The revenues of Chinese steelmakers for the 11 months of 2022 fell by 94.5% y/y

In January-November 2022, the revenues of Chinese steel companies decreased by 94.5% compared to the same period last year – to 22.92 billion yuan ($3.3 billion). SteelOrbis reports about it with the reference to the National Bureau of Statistics of China.

The rate of decline in revenues in the sector of smelting and rolling of ferrous metals in January-November this year increased by 1.8 pp compared to the indicator in January-October 2022.

The revenues of China’s mining industry (extraction and beneficiation of ferrous metals) for the 11 months of 2022 amounted to 54.85 billion yuan ($7.9 billion), which is 27.6% less compared to January-November 2021. During this period, the steelworking sector reduced revenues by 10.4% y/y, and producers of railway, shipping, aerospace and other equipment – ​​by 8.2% y/y, to 178.7 billion yuan ($25.7 billion).

In January-November 2022, the aggregate gross profit of large and medium-sized enterprises in China amounted to 7.72 trillion yuan ($1.1 trillion), which is 3.6% less than in the same period of 2021.

The revenues of Chinese companies in the mining and metal complex fell sharply in 2022 due to unfavorable conditions in the world market and strict restrictions of the authorities to prevent the spread of the coronavirus. In December, the country’s government decided to relax quarantine restrictions to stimulate the recovery of the country’s economy, which allowed some recovery of steel production, but a sharp increase in the number of diseases does not give confidence to steelmakers and the market as a whole.

In the winter period, the revenues of China’s steelmakers are unlikely to be restored due to high morbidity, which may cause repeated mass restrictions and stagnation of the country’s economy. In addition, global demand for steel is low, causing mass shutdowns of steel plants in Europe and partly in China to balance the demand and supply of metal products.

As GMK Center reported earlier, in January-November 2022, China reduced production of steel by 1% compared to the same period of 2021. The production of steel products reached 1.225 billion tons, decreasing by 0.7% y/y. The output of pig iron during this period decreased by 0.4% y/y – to 795.06 million tons. Import of iron ore to China decreased by 5.8% y/y – to 98.85 million tons in 11 months.

China is the largest producer of steel in the world. In 2021, Chinese steelmakers reduced steel production by 3% compared to 2020 – to 1.03 billion tons.