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.