On the evening of August 27th, Baosteel Co., Ltd. (600019) released its semi-annual report for 2024. During the reporting period, the company achieved a total operating income of 163.251 billion yuan, a year-on-year decrease of 3.89%; it also realized a net profit attributable to shareholders of the listed company of 4.545 billion yuan, a slight year-on-year decrease of 0.17%.

Baosteel Co., Ltd. is one of China's most modernized ultra-large steel conglomerates and is also a world-leading steel conglomerate. The company has major manufacturing bases such as Baoshan in Shanghai, Qingshan in Wuhan, Dongshan in Zhanjiang, and Meishan in Nanjing, making it one of the steel enterprises with the most complete range of carbon steel products globally.

Advertisement

During the reporting period, the company had many operational highlights. For instance, its operating performance maintained the first place in the domestic industry. The semi-annual report shows that the company overcame pressures and challenges such as the downturn in the steel market and the narrowing of the purchase and sales margin difference. By focusing on "four modernizations" and "four haves," the company deepened the integration of production, sales, and research, transformed the purchasing and sales system, strengthened accounting management, optimized product structure, adhered to benchmarking and finding gaps, continuously explored the synergistic value of multiple bases under one company, and promoted high-quality development. In the second quarter, the company achieved a total profit of 3.44 billion yuan, a sequential increase of 23.5%, and a total profit of 6.23 billion yuan in the first half of the year.

Furthermore, the company continued to promote product differentiation. In the first half of the year, the "1+1+N" product achieved sales of 15.09 million tons, a year-on-year increase of 16.5%; Baosteel's 14,000 tons of 2060MPa high-strength, high-torque bridge cable steel CableBri® helped the Shenzhen-Zhongshan Corridor to open on schedule in the first half of the year. The company actively expanded the overseas market, with a total export order of 3.035 million tons in the first half of the year, setting a historical record for the same period.

At the same time, the company deeply explored the potential for cost reduction. The company fully promoted benchmarking and cost-cutting efforts, focusing on efficiency improvement, economic furnace materials, energy consumption, and strict cost control, and continuously promoted cost reduction and other potential exploration efforts. In the first half of the year, the company achieved a cost reduction of 4.55 billion yuan, exceeding the target progress, which strongly supported the company's operating performance.

In terms of technological innovation, the company achieved the global debut of nine products such as oriented silicon steel B23P080 in the first half of the year; the sales volume of new trial products in the first half of the year reached 3.268 million tons, exceeding the annual target progress; large scrap steel ratio low-carbon automotive panels and low-carbon home appliance panels were successfully produced, with some varieties having a scrap steel ratio exceeding 50%, achieving a breakthrough in the industry for the production of multiple varieties with a large scrap steel ratio. Baosteel BWind500 wind power steel received the industry's first batch order for high-performance wind power steel at the 500MPa level. The successful development of Baosteel's high-grade mining chain steel filled the domestic gap.

From the industry perspective, the world economic situation remains severe and complex this year, with domestic steel demand being sluggish, and the recovery of downstream industry demand being lower than expected. The steel industry generally shows a pattern of strong supply, weak demand, high costs, and low prices.

Iron ore prices fell unilaterally in the first quarter, rebounded at the beginning of the second quarter, and then began to fluctuate downward at the end of May. The average iron ore price index (62% Fe) was 117.7 in the first half of the year, basically the same as the previous year, and the price is still at a high level overall; the average Shanxi Lvliang main coke coal price was 2,050.3 yuan/ton in the first half of the year, a year-on-year increase of 4.6%. The China Iron and Steel Association's comprehensive steel price index (CSPI) was 108.2 in the first half of the year, a year-on-year decrease of 4.9%. Steel prices continued to fall in the first quarter, rebounded slightly in the second quarter, and then fell rapidly in June. The domestic crude steel production was 527 million tons in the first half of the year, a year-on-year decrease of 1.1%; the global crude steel production was 938 million tons, basically the same as the previous year.

During the reporting period, the company completed a pig iron production of 24.117 million tons, crude steel production of 26.306 million tons, and sales of 25.514 million tons of commercial semi-finished materials, achieving a consolidated total profit of 6.23 billion yuan.

Looking forward to the second half of the year, the steel industry will continue to face a situation of oversupply, and steel enterprises will still be under pressure. In terms of downstream demand, the demand for steel in the shipbuilding and new energy sectors is the main force. Due to the increase in tariff barriers and the rise of international trade protectionism, there is a certain degree of uncertainty in exports.In the second half of the year, the company will deeply promote the development of "four modernizations," maintaining its leading position in industry technology, enhancing the differentiation capability of its products, accelerating digital transformation and intelligent upgrading, and becoming a green and low-carbon model in the industry. It will deepen the integration of production, sales, and research into a unified entity, actively leverage the synergistic advantages of multiple bases, fully stimulate the internal dynamics of the enterprise, and enhance core competitiveness. The company will comprehensively benchmark and identify gaps, further improve the efficiency of value creation for all factors, promote high-quality development of the enterprise, and maintain its leading position in domestic industry performance.