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Wuhan Iron and Steel and Angang very different results

       Despite the rising costs of raw materials are subject to pressure, but the domestic shares of Wuhan Iron and Steel and Angang Steel giant also announced first-half results today are a far cry from.Wuhan Steel shares in the first half results show that first-half attributable to shareholders of listed companies net profit of 1.226 billion yuan, an increase of 14.73%.First-half earnings per share of 0.125 yuan’s basic, an increase of 11.61%.
       The first half of this year, Wuhan Steel shares revenues 50.822 billion yuan, up 23.22%; company Aoyama headquarters of iron,ERW steel pipe, timber production was 8.4748 million tons, 8.879 million tons and 8.289 million tons, an increase of 10.98%, respectively, 10.45% and13.57%.
        While revenues and profits are up, but Wuhan Iron and Steel shares also frankly stated in the semi-annual report, due to raw material and fuel prices, cost of sales also increased, so the gross margin decline.
         For the second half, Wuhan Steel shares also believe that production and management face a more severe test, “high-yield, high cost and low efficiency” has become the main theme of the steel industry to run.
         Wuhan Steel shares, compared with the same trapped in raw material costs Angang Steel Company, in the first half attributable to shareholders of listed companies net profit of 2.2 billion yuan, up 92% significantly reduced.The company’s basic earnings per share 0.03 yuan, up 92.11% also reduced.
         Reasons for the decline of profits, Angang Steel bars Company that was mainly due to changes in the steel market conditions, fuel prices rise faster than the original price of steel rises, the benefits of steel prices is far from the original fuel prices to compensate for increased costs resulting from impact.
        In this regard, Changjiang Securities analyst Liu Yuanrui expected, Anshan Iron and Steel channel angles Division as related party transactions required to model ore purchases from Group companies, pricing model for the reference port on a semi-annual ore CIF price and then give a 5% discount.Ore from the port of Qingdao port CIF price point of view, the second half of the ore benchmark pricing of related party transactions of the first half of the chain there may be about 10% of the increase, the cost pressure is still heavy.
         It is noteworthy that, in the Anshan Iron and Steel shares before the Maanshan Iron & Steel, Liuzhou Iron and Steel shares, shares and other steel companies Shagang first half profits have declined, a number of industry insiders, told reporters that this year, with iron ore spotprice of the benchmark quarterly or monthly pricing mechanism eroded the profitability of steel, and coking coal and scrap steel and other raw material and fuel prices are high.High cost of operation is significantly restricted the expansion of steel profits of the important reasons.
         However, Shanxi Securities analyst Liu Junqing analysis report is expected in the second quarter, iron ore prices have risen to record highs, but in the global steel market downturn, slowdown in consumption under the premise of the end of the three mine expansion project will becompleted, China launched the iron ore price index, in a variety of factors, the price of iron ore from the highs has become inevitable.Can effectively reduce the cost of steel prices and profits rise from the bottom.

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