The price of raw fuel has soared. Angang's profit fell by more than 90%. It is also an iron and steel company, which is also constrained by iron ore price factors. However, in the first quarter of this year, the three major steel listed companies in China were Baosteel (600019.SH) and Wuhan Iron and Steel (600005.SH). ) The performance of Angang Steel (000898.SZ) is quite different.
In the first quarter of this year, the profit levels of the three listed steel companies were very different. According to the quarterly report released yesterday by Anshan Iron & Steel Co., Ltd., the company achieved a net profit of 71 million yuan in the first quarter of this year, a substantial decrease of 93.82% year-on-year; Wuhan Iron and Steel Co., Ltd. realized a net profit of 610 million yuan, a substantial increase of 111% year-on-year; Baosteel Co., Ltd. has not yet released a quarterly report. Brokerage analysts revealed to the "First Financial Daily" yesterday that Baosteel's net profit in the first quarter had a slight decline, which may be about 10%.
Nanjing Iron & Steel Co., Ltd. (600282.SH), which shares a similar pattern with the Wuhan Iron and Steel Group's iron ore procurement model, also saw a rise in its profit in the first quarter of this year, which achieved a net profit of 271 million yuan, a year-on-year increase of 9.21%.
For the first quarter results decline, Anshan Iron and Steel shares gave a seemingly "reasonable" explanation. The company said that it was mainly due to the substantial increase in the price of raw fuel to increase the cost of the product. However, it is worth noting that the rise in the price of raw materials such as iron ore and coking coal is not just an issue faced by Angang Steel. In fact, this is a common problem faced by domestic steel companies.
Since domestic steel companies face the same problems, the three companies have such large differences in the first quarter of this year. In addition to the differences in the product structure of the three major companies, they are also largely attributed to the iron ore procurement model of the three companies.
The iron ore of WISCO and Baosteel shares mainly depends on imports, and the self-sufficiency rate of iron ore of Anshan Iron and Steel is relatively high, but nearly half of the iron ore of Anshan Iron and Steel Co., Ltd. is domestic iron ore that was purchased from the Anshan Iron and Steel Group mining company.
Judging from the pricing model, after the annual long agreement price model was broken by three major international mining companies, according to Deng Qilin, chairman of Wuhan Iron and Steel Co., Ltd. previously introduced to the newspaper, Wuhan Iron and Steel Co., Ltd. adopts quarterly pricing, monthly pricing, and spot pricing. Ores; Baoshan Iron & Steel Co., Ltd. only adopts a quarterly pricing model; the Anshan Iron and Steel Co., Ltd. purchases ore from the Group adopts a semi-annual pricing model. Not only that, Anshan Iron and Steel Group also promised to provide Angang Steel with preferential price for the maximum amount determined, and the preferential amount is the first half. The average annual customs quotation for imported iron ore concentrates from China is 5%.
According to the principle of iron ore procurement of Anshan Iron and Steel Company, the procurement price of Anshan Iron & Steel Co., Ltd. for the first quarter of 2010 was based on the second half of 2009. In the second half of 2009, the international iron ore price was at a low point; in the first quarter of 2011, The purchase price is based on the second half of 2010, but international iron ore prices are at a high point in the second half of 2010.
In the first quarter of this year, the price of iron ore fell compared to the fourth quarter of last year. Relatively speaking, the cost of steel plants using spot pricing was lower, while the cost of steel plants using semi-annual pricing was higher. This means that if we look at the financial situation of the three companies in the first quarter of this year, the annual pricing and semi-annual pricing models are not necessarily more conducive to the development of steel companies.
At the Baosteel 2010 performance briefing held on March 31st, for the long-term existence and index pricing model of Baosteel, Baosteel Chairman He Wenbo believes that the short-term pricing mechanism has advantages and disadvantages for Baosteel, such as the 4th quarter of 2008. Price, 10 million tons of mine is all high-priced mines, digesting this part of the high-priced mine is not easy.
In He Wenbo's view, if the price of ore rises and the price of steel also rises, the risk to the steel plant is small, but the adjustment of steel prices lags behind the adjustment of the ore price. The turning point is often the first drop of the steel price and the reorientation of the ore price.
However, the performance of the three major steel mills in the first quarter of this year cannot explain the short-term pricing models such as spot pricing and quarterly pricing, which will certainly benefit the development of steel mills. Whether the short-term pricing model or the long-term pricing model is beneficial to iron and steel enterprises, it needs to see what kind of trend the iron ore price will be in the future. If iron ore prices are increasing in the coming years, long-term pricing models such as annual and semi-annual benefits will be favorable to steel companies; if iron ore prices are in a downward avenue, long-term pricing models are not conducive to steel companies. The model is more conducive to steel companies to reduce procurement costs.
In the first quarter of this year, the profit levels of the three listed steel companies were very different. According to the quarterly report released yesterday by Anshan Iron & Steel Co., Ltd., the company achieved a net profit of 71 million yuan in the first quarter of this year, a substantial decrease of 93.82% year-on-year; Wuhan Iron and Steel Co., Ltd. realized a net profit of 610 million yuan, a substantial increase of 111% year-on-year; Baosteel Co., Ltd. has not yet released a quarterly report. Brokerage analysts revealed to the "First Financial Daily" yesterday that Baosteel's net profit in the first quarter had a slight decline, which may be about 10%.
Nanjing Iron & Steel Co., Ltd. (600282.SH), which shares a similar pattern with the Wuhan Iron and Steel Group's iron ore procurement model, also saw a rise in its profit in the first quarter of this year, which achieved a net profit of 271 million yuan, a year-on-year increase of 9.21%.
For the first quarter results decline, Anshan Iron and Steel shares gave a seemingly "reasonable" explanation. The company said that it was mainly due to the substantial increase in the price of raw fuel to increase the cost of the product. However, it is worth noting that the rise in the price of raw materials such as iron ore and coking coal is not just an issue faced by Angang Steel. In fact, this is a common problem faced by domestic steel companies.
Since domestic steel companies face the same problems, the three companies have such large differences in the first quarter of this year. In addition to the differences in the product structure of the three major companies, they are also largely attributed to the iron ore procurement model of the three companies.
The iron ore of WISCO and Baosteel shares mainly depends on imports, and the self-sufficiency rate of iron ore of Anshan Iron and Steel is relatively high, but nearly half of the iron ore of Anshan Iron and Steel Co., Ltd. is domestic iron ore that was purchased from the Anshan Iron and Steel Group mining company.
Judging from the pricing model, after the annual long agreement price model was broken by three major international mining companies, according to Deng Qilin, chairman of Wuhan Iron and Steel Co., Ltd. previously introduced to the newspaper, Wuhan Iron and Steel Co., Ltd. adopts quarterly pricing, monthly pricing, and spot pricing. Ores; Baoshan Iron & Steel Co., Ltd. only adopts a quarterly pricing model; the Anshan Iron and Steel Co., Ltd. purchases ore from the Group adopts a semi-annual pricing model. Not only that, Anshan Iron and Steel Group also promised to provide Angang Steel with preferential price for the maximum amount determined, and the preferential amount is the first half. The average annual customs quotation for imported iron ore concentrates from China is 5%.
According to the principle of iron ore procurement of Anshan Iron and Steel Company, the procurement price of Anshan Iron & Steel Co., Ltd. for the first quarter of 2010 was based on the second half of 2009. In the second half of 2009, the international iron ore price was at a low point; in the first quarter of 2011, The purchase price is based on the second half of 2010, but international iron ore prices are at a high point in the second half of 2010.
In the first quarter of this year, the price of iron ore fell compared to the fourth quarter of last year. Relatively speaking, the cost of steel plants using spot pricing was lower, while the cost of steel plants using semi-annual pricing was higher. This means that if we look at the financial situation of the three companies in the first quarter of this year, the annual pricing and semi-annual pricing models are not necessarily more conducive to the development of steel companies.
At the Baosteel 2010 performance briefing held on March 31st, for the long-term existence and index pricing model of Baosteel, Baosteel Chairman He Wenbo believes that the short-term pricing mechanism has advantages and disadvantages for Baosteel, such as the 4th quarter of 2008. Price, 10 million tons of mine is all high-priced mines, digesting this part of the high-priced mine is not easy.
In He Wenbo's view, if the price of ore rises and the price of steel also rises, the risk to the steel plant is small, but the adjustment of steel prices lags behind the adjustment of the ore price. The turning point is often the first drop of the steel price and the reorientation of the ore price.
However, the performance of the three major steel mills in the first quarter of this year cannot explain the short-term pricing models such as spot pricing and quarterly pricing, which will certainly benefit the development of steel mills. Whether the short-term pricing model or the long-term pricing model is beneficial to iron and steel enterprises, it needs to see what kind of trend the iron ore price will be in the future. If iron ore prices are increasing in the coming years, long-term pricing models such as annual and semi-annual benefits will be favorable to steel companies; if iron ore prices are in a downward avenue, long-term pricing models are not conducive to steel companies. The model is more conducive to steel companies to reduce procurement costs.
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