Recently, Xining Special Steel Co., Ltd. announced that the company established a joint venture to explore Yemaquan and Tawenchahanxi iron ore filed in Qinghai. Relying on existing special steel production (with capacity of about 120 tons), it continued to extend to the industry upstream and expand resources control ability. In 2010, the special steel business contributed 86% and 48% of the total revenue and gross profit respectively.
Sales and Gross Margin of Xining Special Steel by Product, 2009-2010 (RMB mln)
|
|
Sales
|
Gross Profit
|
Gross Margin
|
|
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
|
Alloy Structural Steel
|
2,586
|
3,617
|
267
|
376
|
10%
|
10%
|
|
Carbon Structural Steel
|
1,180
|
1,347
|
73
|
120
|
6%
|
9%
|
|
Bearing Quality Steel
|
413
|
511
|
54
|
70
|
13%
|
14%
|
|
Stainless Steel
|
261
|
336
|
48
|
64
|
18%
|
19%
|
|
Alloy Tool Steel
|
110
|
115
|
16
|
19
|
14%
|
17%
|
|
Carbon Tool Steel
|
32
|
49
|
6
|
7
|
19%
|
15%
|
|
Spring Steel
|
1
|
1
|
0
|
0
|
15%
|
23%
|
Source: Xining Special Steel; ResearchInChina
Special steel products of Xining Special Steel are mainly applied in automobile, machinery and oil industry etc. Market share of its G20 railway carburizing bearing steel exceeds over 55%, while that of its 27SiMn hydraulic prop tube for coal mine registers over 70%. Benefiting from the rising demand from downstream industry, gross margin of steel manufacturing business of the company increased to 11% in 2010 from 10.1% in 2009. However, in general, special steel products of Xining Special Steel mainly concentrate in medium and low-end fields, with relatively low gross margin compared to other special steel companies.