Due to rapidly rising iron ore prices, China's steel mills realized only 77 billion yuan (around 11.66 billion U.S. dollars) of main business profits in 2010, reported today's Economic Information Daily, a newspaper published by the Xinhua News Agency.
The whole industry is expected to witness total profits of around 85 billion yuan, while 8 billion yuan is investment returns. Latest data from the Ministry of Industry and Information Technology showed that the profit margin for the steel industry was only 3.5 percent, much lower than the overall industrial profit margin of 6 percent.
High costs are believed to be the main cause of the low profits. In the first 11 months of 2010, China's iron ore imports were 6 million tons lower than 2009, but the total import value were 170 billion yuan higher.
The 3.5 percent profit margin still involves massive investment returns.
"Deducting profits from mines owned by the steel mills, lots of steel producers in fact faces negative profits," the newspaper quoted an unidentified source with China Iron and Steel Association (CISA).
Regarding this year's industrial development, the CISA predicted that there will be still "huge risks and pressure." Domestic demand is going to drop, while prices of iron ore, coal and shipment will rise.
The source also pointed out that the pressure of overcapacity still exists.
"High costs, high prices and low profits will dominate the steel industry in 2011," he said.
By People's Daily Online
The whole industry is expected to witness total profits of around 85 billion yuan, while 8 billion yuan is investment returns. Latest data from the Ministry of Industry and Information Technology showed that the profit margin for the steel industry was only 3.5 percent, much lower than the overall industrial profit margin of 6 percent.
High costs are believed to be the main cause of the low profits. In the first 11 months of 2010, China's iron ore imports were 6 million tons lower than 2009, but the total import value were 170 billion yuan higher.
The 3.5 percent profit margin still involves massive investment returns.
"Deducting profits from mines owned by the steel mills, lots of steel producers in fact faces negative profits," the newspaper quoted an unidentified source with China Iron and Steel Association (CISA).
Regarding this year's industrial development, the CISA predicted that there will be still "huge risks and pressure." Domestic demand is going to drop, while prices of iron ore, coal and shipment will rise.
The source also pointed out that the pressure of overcapacity still exists.
"High costs, high prices and low profits will dominate the steel industry in 2011," he said.
By People's Daily Online
