Steel firms slip into red as glut persists

Most of the steel companies listed on the A-share market have seen a sharp erosion in profits during the first six months of the year, due to the glut in domestic production.

Hongxing Co Ltd, a company whose main shareholder is Jiuquan Iron & Steel (Group) Co Ltd, was the worst-performing listed steel company as of Aug 19 with losses of 1.55 billion yuan ($242 million) in the first six months. Hongxing said the losses were mainly due to production overcapacity, a slowing economy and the significant fall in steel prices.

Beijing Shougang Co Ltd, another major producer, has forecast losses of about 200 million yuan to 300 million yuan for the first half of the year.