The semi-annual report has come out of the steel enterprises and the mining enterprises have made profits.

Recently, the semi-annual reports of domestic steel listed companies and foreign ore producers have been continuously introduced, and the results have been compared. While seeing steel companies and mining companies making two profitable days, they also highlight the passive situation of China's steel companies.

Iron ore grabs domestic steel companies profit throat

According to relevant media reports, as of August 24, a total of 21 steel listed companies disclosed semi-annual reports, a total of 360.974 billion yuan in sales revenue, a year-on-year increase of 27.58%, and a net profit of 7.504 billion yuan, a year-on-year decline of 16%. The reason for the increase in sales revenue and the decline in profits is that, apart from the fact that individual steel mills have not obtained revenues from investing in large-scale projects, they are also closely related to the rise in iron ore prices. For instance, Anshan Iron & Steel Co., Ltd. only achieved a net profit of 220 million yuan in the first half of the year, a year-on-year drop of 92%. The main reason for the decrease in profits was that the increase in raw fuel prices was greater than the increase in steel prices. Some professional organizations also believe that after the sharp rise in iron ore prices, the cost of tons of steel ore will rise by about RMB 130/t.

In the general decline in the profits of steel mills, some steel mills have performed well. Jiuquan Hongxing released a semi-annual report, the first half of the total operating income of 27.96 billion yuan, an increase of 41.59%; a net profit of 902 million yuan, an increase of 107.44%. This has a lot to do with the plant’s sales strategy in the first half of the year and the self-sufficiency rate of iron ore reaching 40%. This shows further from the side that the rapid rise in iron ore prices has a huge impact on the profitability of steel mills.

International mining company profitability innovation high

The declining profits of China's steel mills are in sharp contrast to the profit levels of mining companies. On August 24th, the world’s largest mining company BHP Billiton’s performance report showed that the company’s profit for the first half of the year was 13.1 billion U.S. dollars, nearly doubling the 6.6 billion U.S. dollars in the same period of last year, and setting the record for the company’s best half year earnings. A rough estimate of this profit level is 8 times that of domestic leading steel mill Baosteel.

The data shows that the increase in profit of BHP Billiton was mainly attributable to the earnings growth of the iron ore sector and the oil sector, of which the profit of the iron ore sector grew by more than 100% from the same period of last year. According to the 2011 semi-annual report released by the international mining giant Rio Tinto on August 4, the company’s net profit for the first six months was US$7.59 billion, an increase of 30% over the same period of last year. Rio Tinto's operating income for the first half of this year was 29.1 billion U.S. dollars, which was higher than the 24.5 billion U.S. dollars for the same period last year. Among them, iron ore business profit of 5.95 billion US dollars, an increase of 45%.

Steel company profits are still calculated by ore prices

From the comparative analysis of domestic steel mills and international mining companies' semi-annual reports, the passive situation of domestic steel companies is undoubtedly revealed. In addition, some professional people and professional organizations also have many misunderstandings about the international iron ore market. Some people in the industry believe that while iron ore prices are rising, steel prices are also rising, and steel mills have good profits. When the price of iron ore fell, the price of steel fell. At this time, the steel mills did not profit. From this, it can be concluded that the rise in iron ore prices is not a key issue affecting the profitability of steel mills.

Treasure Island senior market analyst Shang Baohe thinks this is obviously wrong. This is not to analyze the interaction between iron ore prices and steel prices from the perspective of the entire industry chain, ignoring the leverage of the capital market for the spot market. influences. The production and sales of iron ore are highly concentrated and easy to control. As long as one key link is under control, the price trend can be controlled. Judging from the situation in recent years, after the three major miners have obtained huge profits, the re-deployment of new energy areas has become an absolute dominant position in new areas. We cannot ignore such follow-up impact. No matter whether it is iron ore resources or other impossible renewable resources, we should pay attention to it from the strategic height. The pressure from domestic iron ore, coke and other raw material prices will continue to increase in the latter part of the domestic steel mills, which will further affect the profitability of steel mills.