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Chinese steel companies report overall loss in first ten months

(Xinhua) Updated: 2015-12-07 13:10

BEIJING - China's large and medium-sized steel mills suffered a loss of 72 billion yuan ($11.34 billion) in the first ten months of 2015, according to China Iron and Steel Association (CISA).

Of the 101 steel mills tracked by CISA, the average sales margin stood at minus 1.5 percent during Jan-Oct period, the worst of the year, said the CISA report.

Slowing investment in the property and infrastructure development, as well as weakening manufacturing, have dragged down domestic demand for steel, which in turn reduced profit for steel makers and forced small players to exit the market, according to the report.

China's manufacturing PMI, an index for factory activity, hit a 39-month low in November, suggesting prolonged contraction and sluggish demand.

In the first 10 months of this year, China's crude steel production dropped 2.2 percent year on year to 675.1 million tons, latest data from the National Development and Reform Commission showed.

On Wednesday, six major steel mills issued a joint statement saying they will cut the production of 200-series stainless steel by 30 percent starting in December. They also suggested that the government suspend approvals for new production capacity.

The CISA predicted that the steel industry will continue to face a cold winter in December.

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