China's economy declines as the steel industry hangs on

Author: Paul Ploumis
19 Sep 2014 Last updated at 07:16:33 GMT
BEIJING (Scrap Monster): The falling of profit margins as well as the increase of the large steel sectors on the handouts has been a severe blow towards the, Chinese steel sector. This blow is being shared with the coal, cement and aluminum sectors of China, whose infrastructure has also been diminished.

From the total number, about 77 of Chinese steel, coal, cement and aluminum sector has been facing shar5p decline in their profits. In half year, the profit of listed companies had been 22 percent, whereas in the year 2013, the profit of these companies was about 47 percent. In the first half of 2014, the profit has hiked into 80 percent, even so the profit margin was halved to 0.3 percent.

Steel has been a major part of the economy in China for long, but the time has arrived in  the country to face challenges as Beijing tries hard rub economy off its dependence on external demand and also the investment spending.

This week's data showed that the output growth of China's factories, is moving in achingly slow pace, which brings up the fear of a slow down, unless brand new measures are taken in Beijing. The company statement also releases that, the Chinese manufacturers are backing up from their payments, which causes a new set of problems like high credit cost as well as financial difficulties.