CITIC Pacific Special Steel is the largest dedicated manufacturer of special steel in China with a production capacity of 9 million tonnes per annum. It operates two plants — Jiangyin Xingcheng Special Steel and Hubei Xin Yegang — which produce bars, plates, seamless steel tubes, wires, forging steel and casting billets. Its customers are primarily in the auto components, energy, machinery manufacturing, oil and petrochemicals, transportation, shipbuilding and other industrial sectors.

Year in review

Global demand for steel remained weak in 2015, while in China steelmakers continued to suffer from excess capacity. Against this operating background, CITIC Pacific Special Steel sold a total of seven million tonnes of special steel products in 2015, a 5% decrease year on year.

More than half of all products manufactured by CITIC Pacific Special Steel in 2015 supplied the auto components and machinery manufacturing sectors, consistent with their contribution last year. Bar steel, plates and seamless steel tubes — the major products of the company — together contributed over three quarters of total sales volume. Over 80% of products were sold in China, and the company maintained the same proportion of export sales as last year. Key export markets are South Korea, Southeast Asia, Europe and North America.

For the year 2015, CITIC Pacific Special Steel recorded revenue of HK$35.2 billion, 23% less than last year due to fewer products sold and lower product prices. In addition, an impairment charge led to a 27% decrease in net profit attributable to shareholders.

Over the year, CITIC Pacific Special Steel continued to invest in optimising its product mix and, at the end of 2015, introduced a sophisticated new production line for alloy bar steel. With an annual designed capacity of 900,000 tonnes, the line will greatly increase total production capacity of higher quality bar steel products. The company also continued to develop new products, which comprised 16% of total production in 2015, up 7% over last year.

Key customers