How Chinese Steel Mills Thrive Despite Low Domestic Demand
Today’s MetalCrawler brings you all the steel news fit to digitally print.
How Big Chinese Mills are Making Money
Plunging iron ore prices are providing a lifeline to some of China’s biggest steel mills and are raising the prospect of a rising tide of exports and increased friction with the European Union, US, India and other export destinations.
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Even as China’s domestic steel demand shrinks and the industry battles chronic overcapacity, lower iron ore prices have helped many large mills post better earnings in 2014 than a year earlier, supported by record exports. Reuters reports that the latest batch of Chinese steel earnings shows just three of 18 big Chinese mills to report so far suffered losses in 2014, down from five the year before. Six of the 13 profit-making mills in 2013 increased profits last year.
Big Chinese mills are able to ship in cheaper seaborne ore direct to their coastal steelmaking operations, selling to customers nearby or shipping steel overseas.
Steel Dynamics Misses
Steel Dynamics Inc. recently reported first-quarter net earnings of $30.8 million or $0.13 per share compared with $38.6 million or $0.17 per share last year.
Excluding items, adjusted earnings for the quarter were $0.17 per share . Revenues for the quarter were $2.05 billion compared with $1.83 billion in the prior year. Analysts polled by Thomson Reuters estimated earnings of $0.15 per share on revenues of $2.15 billion for the quarter.
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