中文
Kailuan Energy Chemical Co., Ltd., a major coal producer in northern China's Hebei province, registered a 41.10% year-on-year decline in net profit attributed to shareholders to 1.09 billion yuan ($154 million) in 2023, the company said in its annual report.
Operating revenue fell 12.16% from a year ago to 22.84 billion yuan last year. Base earnings were 0.68 yuan per share, 41.03% lower than the preceding year.
The main reason for the yearly decrease in operating revenue by 3.17 billion yuan was the impact of falling prices, resulting in a revenue reduction of 4.58 billion yuan, 3.65 billion yuan of which was for coke chemicals.
By adapting actively to changes in market demand and organizing production reasonably, the company managed to partially offset the decline in revenue by 1.38 billion yuan.
Kailuan Energy Chemical attributed the decline in profitability to significant reductions in prices for its main products including washed coal, and metallurgical coke, due to weakened demand in the downstream steel and coke markets.
Although the shutdown of 4.3-meter coke ovens in Shanxi before the end of October temporarily affected the coke supply, the diminishing steel demand in the real estate sector led steel companies to continuously suppress coke prices to reduce costs.
Meanwhile, the overall prices of raw materials such as coking coal remained high, resulting in low profit margins and even losses throughout the coke chemical industry. Limited downstream consumption also constrained chemical plants' profitability.
The company's main businesses include coal mining, raw coal washing and processing, and the production and sale of coke and coal chemical products. Its primary products consist of washed coal, and coke, as well as chemical products such as methanol and pure benzene.
In 2023, the company produced 9.22 million tonnes of raw coal, 5.41 million tonnes of commercial coal and 5.36 million tonnes of coke. Sales reached commercial coal and coke reached 4.14 million and 5.35 million tonnes respectively. The production and sales of the company's products all recorded year-on-year increases.
Kailuan Energy Chemical aims to churn out 9.40 million tonnes of raw coal, 5.28 million tonnes of commercial coal and 5.40 million tonnes of coke this year. Sales targets for commercial coal and coke are 4.37 million and 5.40 million tonnes.
One coal industry development report released by China National Coal Association predicted the coal market in 2024 to remain relatively stable amidst supply and demand adjustments and price fluctuations.
The coke sector faces significant pressure to gain upward strength due to overall excess production capacity, high raw material prices, and the unsustainable nature of the steel industry's massive overcapacity. Coal chemical products encounter growing industry capacity and supply.
(Writing by Riley Liang Editing by Alex Guo)
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