A ton of steel is worth less than 3 pounds of meat; steel product profits drop 81%.

China Justice and反腐 Net - Comprehensive News from "Anti-Corruption and Clean Governance Monthly" Magazine: Every September is the peak season for China's steel market, but this year's steel market is shrouded in frost. Steel profits have fallen by 81% from this year's high point.

According to a report by the Securities Daily on September 16th, a research report released by Zhuochuang Information shows that since late April 2020, the出厂price of steel billets has shown a trend of fluctuating increase, which in turn has driven the continuous rise in the cost price of structural steel, while the corresponding profit margin has been declining. "As of mid-September, the average profit margin for producers of '45# carbon structural steel' (long process) in the domestic structural steel market was 81.5 yuan per ton, down 81.52% from the year's profit peak."

Comparing the prices of fresh produce on e-commerce platforms on September 16th, the steel with an average profit margin of 81.5 yuan per ton could only buy less than 1,500 grams of pork per ton. The wholesale price of pork in China on the 16th was 47.68 yuan per 1,000 grams, and the retail price in Beijing was about 34 yuan per 500 grams.

The decline in steel profits can be attributed to several factors, according to a research report by Zhuochuang Information. Overall, steel prices have been weak, with insufficient demand on the market end, leading to a volatile downward trend in market prices. However, due to the rising costs of raw materials like iron ore and coke, steel mills have repeatedly resisted price drops. On one hand, insufficient demand and falling prices have resulted in poor sales. On the other hand, rising costs for enterprises are accumulating market contradictions.

A recent research report from Zhongtai Securities indicates that while September is a peak season, there has been no significant improvement in steel demand on a year-on-year basis. Social inventory is still accumulating slightly, with a larger increase in rebar inventory for the construction industry, reflecting subpar demand in the sector.

对此，评论员认为，中国经济增长依靠三驾马车(出口、投资、消费)，但目前出口下滑，消费也因为瘟疫及贸易战大幅下滑，只能依靠官方投资(民间投资依然在下滑)，官方投资主要是铁公基(铁路、公路、基建)。然而，目前建筑用的螺纹钢库存累积幅度加大，显示官方声称的经济根本没有起来，既然拉动经济的三驾马车都在下滑，由此可以论证中国GDP增长的数据不真实。

On the outlook for the steel market in the future, Xu Haibin, an analyst at Zhuochuang Information, believes: "The demand side has performed poorly in the third quarter. A significant number of auto and excavator parts manufacturers are still operating at a semi-stopped state. Looking ahead, the steel price trend is expected to decline further in September, with the estimated decline in October being slightly less than that in September, and there is also a possibility of a slight rebound in October."