China's consumption of crude steel will grow 5.6% to 596 million tons in 2010 and will increase by an additional 40 million to 50 million tons in 2011, predicted Luo Bingsheng, deputy director of the China Iron & Steel Association.
Operating margin of the country's 75 largest steel mills were 2.8% for the first 10 months of 2010, with July seeing the lowest margins just below 1.2%. July's decreased margins resulted in the industry reporting its lowest monthly profit of 2.9 billion RMB which was a significant decrease from record earnings reported in April of 12.2 billion RMB when steel prices were much higher. Despite the overall profitability of the the 75 largest steel mills 10 posted combined losses of 3 billion RMB over the first 10 months of 2010, said Luo.
Luo also forecast production of crude steel to expand 8.2% to 624 million tons this year including 27.5 million ton of net export which will be 5.9 times the volume a year ago. He predicted the largest steelmakers would report a combined gross profit of 80 billion RMB for 2010.