Baosteel(SH:600019) Xin Lang Cai Jing·2025-09-09 21:02Core Viewpoint - The steel industry is experiencing a recovery in operating performance due to a decline in raw material prices such as iron ore and coking coal, with many steel companies reporting a return to profitability in the first half of 2025 [1][2]. Financial Performance - In the first half of 2025, 33 steel production companies listed on the A-share market achieved total operating revenue of 882.698 billion yuan, a year-on-year decrease of 9.4%, while net profit reached 10.547 billion yuan, a year-on-year increase of 281.7% [2]. - Among these companies, 22 reported an increase in return on equity [2]. - Baoshan Iron & Steel Co., Ltd. (Baosteel) led with total operating revenue of 151.4 billion yuan and net profit of 4.879 billion yuan [2]. - Zhejiang Jiuli Special Materials Technology Co., Ltd. (Jiuli Special Materials) reported a 26.39% increase in operating revenue to 6.105 billion yuan and a net profit growth of 28.48% to 828 million yuan [2][3]. - Liuzhou Iron & Steel Co., Ltd. (Liugang) saw a net profit increase of 579.54% to 368 million yuan, despite an 8.325% decline in operating revenue [3]. Industry Challenges - The steel industry is facing multiple challenges, including a shift from incremental expansion to optimization, with ongoing supply-demand imbalances [5][6]. - The overall industry is characterized by high production, high costs, high inventory, low demand, low prices, and low efficiency, indicating a "three highs and three lows" situation [5]. - The average price of coking coal has decreased by 350 yuan per ton compared to the same period last year, which has positively impacted production costs for steel companies [5]. Market Dynamics - In the first half of 2025, China's crude steel production reached 515 million tons, a year-on-year decrease of 3.0%, while global crude steel production was 934 million tons [5]. - Steel exports from China increased by 8.9% to 58.147 million tons, with an average export price of 699.3 USD per ton [6]. - The construction sector continues to show weak demand, particularly in the real estate market, while the automotive industry has seen growth but may face consumption exhaustion in the second half of the year [5][6]. Future Outlook - The Chinese steel industry is expected to undergo significant changes, with a projected annual decrease in consumption of 5 to 7 million tons over the next decade [7]. - The Ministry of Industry and Information Technology plans to implement a new round of growth stabilization measures for key industries, including steel, to promote structural adjustments and eliminate outdated capacity [7]. - Experts predict that macroeconomic policies aimed at expanding investment and domestic demand will continue to support a recovery in the second half of the year [7].