Profits in the first 6 months of 2016 is 4 times higher than the same period in 2015 ...

After heavy losses in 2015, in the first half of 2016, the China Steel Corporation has earned high profit return.

From early 2016 until now, the group has suffered a lot of pressure from the Chinese government about the need to restructure and reduce production, according to the Financial Times.

According to information by the chairman of China Steel Association, Mr. Ma Guoqing, provided, the members of the company announced first half net profit reached 12.6 trillion 2016 yuan or 1.9 billion USD.

This profit margin is 4 times higher than the same period in 2015. Group enterprises of China Steel Association produce about 80% of China's steel output.

He Guoqing explained, though steel price fluctuations, but the business is still profitable because they have been correctly forecast market movements and thus adjust business operations accordingly.

The first half of 2016, world steel prices rebound helped the world steel industry support difficulties, last year, world steel prices dropped to near 30%.

However, while the Chinese side is optimistic corporations representing the world's major steel still cautious attitude. The spokesman of the largest steel group ArcelorMittal world last week expressed concern about the prospects of the steel industry during the remainder of 2016 as oversupply continues quite stressful .

Market analyst at Platts fund in Shanghai, Mr. Sebastian Lewis, also said that should not be too optimistic about industry profits in the second half 2016.

Platts' calculations show that the Chinese steel industry is still too much excess supply, the narrow scale of production to reduce supply would need to take place over the long term rather than short term. In fact, according to calculations by the fund, as soon as the recovery of steel prices has many companies enlist increase production again in recent weeks,

In the first half of 2016, the same time as producing somewhat narrowed, China to boost exports to reduce excess supply. China has exported to the world market of 457 million tons of steel, an increase of 9% over the same period.

In the last week, Chinese Premier, Li Keqiang, announced so far the only steel group achieved 30% output reduction targets that the government made.

Therefore in the near future, the government will offer more new measures to encourage corporate mergers and forces companies operating closed weak.

According to Le Thu

Vneconomy