Major Chinese mills post $3.5bn loss in H1

Member mills of the China Iron & Steel Assn (Cisa) saw their combined losses from their steelmaking business quadruple in the first half of 2015.

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Collectively, they incurred a loss of 21.68 billion yuan ($3.5 billion) in the first six months of this year, compared with a loss of 4.9 billion yuan ($800 million) a year earlier, the association’s executive vice-chairman Zhu Jimin disclosed at a press conference in Beijing on Monday July 27.

Of Cisa’s 101 members comprising mostly medium-sized and large steelmakers, 43 of them were in the red during the January-June period. Their combined steel output accounts for 36.8% of that for all Cisa members, Zhu noted.

“The steel industry is in a tough situation, as oversupply remains a big problem due to a decline in apparent consumption of crude steel, although the country’ crude steel output saw its first drop in nearly 20 years in the first half [of 2015],” he said.

Zhu pointed out that China’s apparent crude steel consumption appeared to have peaked, as it fell 3.3% in 2014 and is down by a further 4.7% over the first half of this year. He did not reveal the exact volumes, however.

The country’s crude steel output could also have peaked in 2014; a total of 410 million tonnes were produced in the first half of this year, down 1.3% year-on-year and the first drop in nearly 20 years, he said.

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