Mills profitability undermined by ailing demand

Mills profitability undermined by ailing demand 发布时间:08-11-10    阅读次数:   

Listed steelmakers saw a year-on-year drop of 6.15 percent in their gross profit in the third quarter of 2008 and a 45.9 percent drop from the second quarter. Mills’ profitability will be further hit in the following two months due to low demand and high inventory in the domestic market. Analysts attributed the drop to ailing demand. Listed mills’ profitability was better than the industry average and small sized mills were more flexible in cost control than larger ones. Among the listed mills, flat producers saw a smaller drop of less than 50 percent in profit than that in long producers, who experienced more than 50 percent decline as a whole. The World Steel Association expressed full confidence in a higher growth of demand for steel than that of GDP in 2009 at the 42 nd annual meeting held on October 6, but didn’t make forecast on the worldwide steel market as usual. Sources from the meeting predicated a two to three percent growth in next year’s steel demand, much lower than 2007 and 08. The growth in the real estate sector, which accounts for 36 percent of total steel consumption, is expected to be zero in 2009; that in the auto sector, which accounts for 4 percent, is estimated at decreased 5.16 percent, lower than 12 percent and 32 percent in 2008 and 07 respectively.