Steel industry profits up 26.1 pct in first two months
Shanghai. March 28. INTERFAX-CHINA - China's steel industry saw its profit increase 26.1 percent year-on-year in the first two months of 2011, according to March 27 figures from the National Bureau of Statistics (NBS).
In terms of profit margins, the steel industry was one of China's best performing industries in the first two months.
The figures do not accurately reflect the state of the domestic steel industry, however, ChinaCCM.com analyst Ma Zhongpu told Interfax. "In January and February, steel mills were using iron ore they had purchased in December 2010, when prices were low," Ma said. "Meanwhile, steel prices were extremely high prior to the Spring Festival holiday (in early February), pushing up profits," he added.
Ma expects steel industry profits to fall sharply in March and April. "Steel prices have dropped nearly RMB 400 ($60.96) per ton since the Spring Festival, and steelmakers will soon begin to use the more expensive iron ore purchased in January, which will put a big dent in profits," said Ma.
- KHM
