[SMM Hot Topic] Summary of Q1 Reports from 44 Steel Companies: Nearly 70% Achieved YoY Net Profit Growth

[SMM Hot Topic] Summary of Q1 Reports from 44 Steel Companies: Nearly 70% Achieved YoY Growth in Net Profit

In Q1, the supply-demand imbalance in China's domestic steel market remained prominent. According to data from the National Bureau of Statistics (NBS), in Q1 2025, China's crude steel production reached 259 million mt, up 0.6% YoY. The domestic steel price index in Q1 decreased by 9.9% YoY, while the Platts 62% iron ore index increased by 1.0% YoY. The price of coking coal in Lvliang, Shanxi, decreased by 36.1% YoY. Although the cost of raw materials and fuels for steel companies improved somewhat, the profit margins in the steel industry remained limited due to weak demand in the steel market, and operational pressures persisted.

Summary of Q1 2025 Report Data from 44 Steel Companies

Based on the Q1 2025 reports disclosed by 44 steel companies, many steel enterprises achieved YoY growth in both net profit and net profit excluding non-recurring gains and losses since the beginning of the year. Among them, 28 steel companies saw an increase in net profit compared to the same period last year, while only 16 experienced a decline. Meanwhile, 30 steel companies also showed a growth trend in net profit excluding non-recurring gains and losses, with only 14 experiencing a decline.

Among them, Guangda Special Steel, which achieved significant growth in operating revenue, attributable net profit, and net profit excluding non-recurring gains and losses, explained in its report that the main reasons for the growth were the overall improvement in industry demand, robust production and sales, internal adjustments to the product mix, cost reduction and efficiency enhancement through process optimization, and a gradual recovery in gross profit margins. Meanwhile, the company's fundraising and investment projects turned profitable through capacity adjustments, expanding high-quality customer bases, and process optimization.

Jinling Mining, which also achieved a YoY growth trend, stated in its report that the main reasons for the growth were the increase in production and sales of iron ore concentrates, an increase in operating revenue, and a reduction in unit production costs.

CITIC Special Steel continued to move forward with relative stability, with attributable net profit in Q1 reaching 1.384 billion yuan, up 1.76% YoY. Although operating revenue declined somewhat, this did not have a significant impact on the company's profitability.

Even more impressive was Fangda Special Steel. In terms of total net profit and net profit excluding non-recurring gains and losses, it ranked second among the 44 steel companies, second only to Baosteel. Its net profit in Q1 was 250 million yuan, up a staggering 168% YoY. Despite operating revenue of 4.346 billion yuan, down 26.03% YoY, the company successfully achieved significant profit growth through efficient cost control and meticulous adjustments to its market strategy.

Outlook

In summary, the growth in net profit of steel companies in Q1 2025 is undoubtedly a positive signal. However, to achieve more robust development, continuous exploration is needed on the path towards high-end, intelligent, and green development, driving the comprehensive upgrading of the steel industry. Adhering to innovative development and enhancing core competitiveness are the keys for enterprises to remain invincible in future market competition. Regarding the future industry situation, steel enterprises still need to strictly control their production. In recent years, the surplus of domestic crude steel and the losses in the industry have surpassed those in the previous surplus cycle before the supply-side structural reform (2011-2015). The National Development and Reform Commission (NDRC) has once again proposed regulating crude steel production, further increasing the possibility of production reduction, which may initiate a new round of capacity exits in the industry. Therefore, steel enterprises need to continuously improve their manufacturing capabilities, vigorously promote cost reduction through factor optimization, actively seize market opportunities, continuously increase the production of differentiated products, focus on the pain points of core businesses, and steadily advance to drive the steel industry towards a "high-intelligence, green" direction.