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Update Alerts

China steel mills profits slump, loan default risks rise

02 July 2012

Profits earned by profit-making steel mills in China slumped 94.26% YoY to Rmb2.53bn in the period from January to May this year, while loss-making steel companies posted a 27 fold jump YoY in losses to Rmb11.75bn in the same period. We think the data reinforces a sense of caution over steel companies which experienced narrowing margins, rising accounts receivable and rising concern over steel’s use as a form of financial collateral during June, according to our grassroots research (CC June 28 Big Call).

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