Chinese steel producers have made substantial profit in the past six months due to the strong steel market. In their public earnings reports and forecasts, these mills indicated that steel prices and demand recovered strongly in the first half of the year, Kallanish notes.

Liugang Group's listed company expects to see H1 net profit attributable to shareholders of the listed company increase by CNY 1.04-1.191 billion ($161-184 million) compared with H1 2020, up 135-154% year-on-year.

Fushun Special Steel predicts a H1 profit of CNY 415-450m, a year-on-year increase of 126.38-145.47%. Amid steady growth in market demand for high-value-added products, the company continued to increase production and sales of key products in H1, while adjusting and improving the product structure, it says.

Baowu Group's Xinjiang subsidiary, Bayi Iron & Steel, expects H1 net profit will increase by about CNY 1.207 billion, a year-on-year increase of about 1,744%. The substantial increase is due to the weak operating performance of the company a year earlier due to the impact of Covid-19. The steel market recovered and steel prices rose sharply in H1.

Jiugang Hongxing also expects to turn from loss to profit, with a net attributable profit of about CNY 1.933 billion in H1, an increase of CNY 2.016 billion y-o-y. 

Sangang Minguang’s H1 net attributable profit is expected to be CNY 2.73 billion, a year-on-year increase of 132.27%.

Most steel companies in China achieved higher profits in H1. H2 performance is under pressure, however, as the steel market has cooled down and steel prices and margins have fallen.