The downstream customers’ effective demand was insufficient. At the same time, affected by factors such as increasing international trade pressure and total energy consumption restrictions, the stainless steel pipe industry faced great production and operation pressure. Wujin Stainless Steel’s performance in the first half of the year fell by more than 20% year-on-year.
On the 27th, Wujin Stainless Steel released its 2024 interim report. In the first half of this year, the company achieved a total operating income of 1.532 billion yuan, a year-on-year decrease of 16.22%, and a net profit of 140 million yuan attributable to the parent company, a year-on-year decrease of 23.97%; non-net profit was 132 million yuan, a year-on-year decrease of 24.25%.
Wujin Stainless Steel stated in its semi-annual report that the main reason for the decline in performance was that the company’s downstream petrochemical industry demand was lower than expected, and the sales price of stainless steel welded pipes fell. Although the company continued to optimize and adjust its product structure and increase the market development of high value-added products, it failed to make up for the decline in sales revenue, resulting in a reduction in the company’s profit margin.
The company’s raw materials are mainly stainless steel round steel and stainless steel plates. The price of stainless steel did not show an obvious trend in the first half of the year. The company adopts an order-based production method of “production based on sales” and determines the sales price based on the cost of raw materials.
According to the company’s semi-annual operating data released during the same period, the company’s production and sales of stainless steel seamless pipes declined in the first half of the year, with a production volume of 20,271 tons, a year-on-year decrease of 28.39%, and a sales volume of 22,982 tons, a year-on-year decrease of 12.62%. However, with the increase in product added value, the average selling price of stainless steel seamless pipes in the first half of the year reached 48,507.41 yuan/ton, an increase of 6.17% over the same period last year; while the production, sales and selling prices of stainless steel welded pipes all declined. The production and sales volumes in the first half of the year were 15,394 tons and 16,299 tons, respectively, a year-on-year decrease of 14.37% and 2.11%, and the product price dropped from 28,054.16 yuan/ton to 22,593.33 yuan/ton, a decrease of 19.47%.
In August last year, Wujin Stainless Steel’s 20,000-ton high-performance stainless steel seamless pipe project for high-end equipment was put into production. However, judging from the company’s seamless pipe production and sales data in the first half of the year, the project’s capacity has not been utilized.
Judging from the performance of other listed companies in the stainless steel pipe industry, Changbao Co., Ltd., which also focuses on stainless steel pipes in the petrochemical industry, also saw a decline in its performance in the first half of the year, with profits falling from 450 million yuan in the same period last year to 326 million yuan in this period, a decrease of 27.6%. Shengde Xintai, which focuses on ultra-supercritical thermal power boiler tubes, achieved a substantial increase in performance, with net profit increasing from 51.4162 million yuan in the same period last year to 123 million yuan in this period, an increase of 139.61%.
Faced with the challenges of slowing market demand growth and overcapacity, Wujin Stainless Steel is promoting key special alloy pipe projects. It is expected that after the project reaches full production, it will produce 20,000 tons of nickel alloy seamless pipes for energy equipment, 35,000 tons of high-end nickel alloy and titanium alloy extruded pipes for hydrogen storage and aerospace equipment, and 600 tons of high-gloss and high-performance stainless steel seamless pipes for the semiconductor industry.
Post time: Aug-30-2024