It is reported that Chinese steel private steel mills are under heavy pressures now. Some of these private steel mills are seeking for other ways to survive.
Mr Zhang Xiangqing president of Tianjin Rockcheck Steel Group Co Ltd is said to go dabble in medicine due to the great pressure caused by the macroeconomic environment, oversupplies and other problems, such as rising raw material costs.
His steel group was also affected by the nationwide energy saving campaign starting from Sep this year in Tangshan. Besides, Chinese steel mills'' profits have been greatly squeezed by the continuously rising raw materials.
For domestic private steel mills, it is unfair that they are deprived of the right for the talk with iron ore miners. And the speculation in the iron ore market drives spot iron ore even further. Plus many policies to limit private steel mills'' development and fiercer competition, it becomes increasingly difficult for private mills to survive.
According to CISA data, large and medium steel mills only achieved a rate of return of 2.8%. The main operation revenue only added up to CNY 63.845 billion with sales profits of 2.58%. Almost no steel mill could make money with present iron ore price of USD 172 per tonne.
A president of another steel mill told the reporter that he is also considering what else to do for a living. He decides to extend his business to downstream industries such as processing.