The profitability of China’s privately-owned steel mills edged past that of their state-owned peers last year as greater flexibility in management allowed them to rein in production and turn to cheaper raw materials amid a rally in iron ore prices, reported Caixin.
Profits of China’s major privately-owned steel mills rose 6.1% year-on-year to RMB 161 billion ($24.9 billion) in total in 2020, with an average operating margin of 4.8%, Wang Lianzhong, vice president of the China Chamber of Commerce for Metallurgical Enterprises (CCCME), said Tuesday. That outstripped the main state-owned steel mills, whose margins dipped to 4.41%, according to data from the China Iron and Steel Association.
The increase in profitability of private steel mills is the result of “actively adapting to market changes” and “proactively controlling production,” said Wang, who spoke at an industry conference.
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