Wugang benefits from CRGO production amid downturn
Sunday, 30 Nov 2008
It is reported that Sichuan based Wuhan Steel Group has felt the pressure of falling steel prices and soaring input costs since the second half, however, different from others, its grain oriented silicon steel production has contributed a lot to its profit.
Wugang aims to achieve CNY 10 billion of profit this year and it seems the deepening economic turmoil is set to press it lower. However, the steel group has fulfilled profit of CNY 9.3 billion by the mid of November, with grain oriented silicon steel production breaking 1 million tonnes for the first time.
Domestic ex works prices for common carbon steel and non grain oriented silicon steel have posted sharp decline, whereas price for grain oriented silicon steel, which price is several or a dozen times than that of common steel products, has remaining unchanged. The product takes up less than 10% of the steel maker's whole product offerings, but it contributes over 60% of the total profit since the mill is the sole one at home capable for bulk production of the product and occupies half of domestic market.
The National Silicon Steel Engineering Technology Research Center has also settled in Wugang recently. And the steel producer has made further progress in producing super quality silicon steel high magnetic induction grain-oriented silicon steel this year, which claimed as China Steel Brand by China Association for Science and Technology.
The product, mainly used in transformer production, will share the cakes of CNY 330 billion investments unveiled by the central government in power grid construction in days to come. Meanwhile, as one of the four home top steel rail producer, Wugang also has felt some warm as the Ministry of Railway has lately revealed a CNY 3.5 trillion spending in railway construction, of which steel rail will secure about CNY 350 billion.
The steel mill's weathering steel has filled the home production blank, which is applied in high-strength railway car manufacturing, and the mill is carrying out aptitude testing recently for its long steel rail with speed of 350 KPH and its capacity would reach 1.05 million tonnes per year.
