China’s Steel Sector Posts Record Profit in 2021 Following 75% Surge

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China’s steel sector posted record-high profits in 2021, as the national economy recovered from the impacts of the COVID-19 pandemic.

In 2021 the ferrous metals smelting and rolling sector saw operating revenues of 9.66623 trillion yuan for year-on-year (YoY) growth of 32.2%, according to data from China’s National Bureau of Statistics (NBS).

Operating costs grew 31.0% YoY to hit 8.84981 trillion yuan, while total profits were 424.09 billion yuan, for YoY growth of 75.5%.

“In 2021 the steel sector’s profits surpassed those of 2018 to reach a new record high,” said Wang Guoqing (王国清), chair of the Langge Steel Research Centre (兰格钢铁研究中心), to state-owned media.

“The main reasons were that average steel prices greatly increased, and the rise in profits per ton of steel drove a marked increase in overall profits.

“In 2021, the Langge National Comprehensive Steel Materials Price Index had an average value of 5445 yuan, for a YoY rise of 35.1%.

“The Langge Steel Research Centre estimates that average gross profit per ton of steel was 525 yuan [in 2021], for an increase of 101.9% compared to the previous year.”

28 out of 29 A-share steel companies posted profits in their preliminary reports for 2021, with only 1 seeing losses, and just three anticipating a YoY decline in profits.

19 of China’s listed steel companies also anticipate that 2021’s net profits will exceed 1 billion yuan, led by Baoshan Iron and Steel, which forecasts an 86 – 89% YoY rise in net profits attributable to shareholders to hit 10.9 – 11.3 billion yuan.