Iron, steel companies see costs soar

Costs for China’s large- and medium-sized iron and steel manufacturers rose by 57.57% in the first half of the year, state media reported. The China Iron and Steel Association (CISA) said that soaring prices of materials and fuel led to a US$36.5 billion hike in costs in the first half. Meanwhile, the rate of return on sales for large- and medium-sized iron and steel suppliers was 7.61%, 0.95 percentage points lower than the same period last year. Ma Keming, a Huatai Securities analyst, said the increased costs would hurt profits for listed iron and steel producers. CISA Vice President Luo Bingsheng predicted that steel prices will stay high for the remainder of the year. He also predicted reduced domestic demand and saw little chance of new controls on steel exports.