China Steelmakers Book 1.3 Bln Yuan Profit in May

飞雪寒冰

China's 72 major steel companies booked a combined profit of 1.3 billion yuan in May, breaking a seven-month string of losses after a rebound in demand and prices, an industry official said.

Chi Jingdong, deputy secretary general of the semi-official China Iron & Steel Industry Association (CISA), disclosed the result to Caijing on June 26. He did not elaborate.

Major steelmakers booked a 1.9 billion yuan loss in April, and 5.2 billion over the January to April period, according to CISA data

飞雪寒冰

The central government's 4-trillion-yuan stimulus package had begun to kick in, driving up fixed-asset investment and consumption, according to Chi. Demand for steel products increased on the back of projects funded by the stimulus, while dwindling finished-product inventories and rising raw material costs boosted prices.

China produced 46.5 million tons of crude steel in May, up 0.6 percent year-on-year, while daily crude steel production reached a five-month high of 1.5 million tons.

The domestic steel product price index stood at 98.14 at end-May, up 2.7 percent month-on-month, CISA said.

However, despite a gradual reduction in inventories, China's steel industry is still suffering from overcapacity, making it difficult to sustain the recent price rise over the long term, Chi added.