Financial Associated Press, November 8th (Reporter Zhang Liangde) The steel industry continued to be under pressure in the third quarter. Chairman Zhang Peng of Lingyuan Iron & Steel (600231.SH) stated to the Financial Associated Press reporters at today's third-quarter performance briefing, 'The industry's supply and demand imbalance situation has not yet been alleviated, and the future steel industry will still need to achieve sustainable development through capacity reduction, cost control, and increasing product added value.'

In the third quarter of this year, Lingyuan Iron & Steel incurred a loss of 0.841 billion yuan, the highest quarterly loss since the company went public. Zhang Peng stated that the main reason for the company's third-quarter loss was the decrease in steel prices, as well as losses from the disposal of fixed assets and provision for asset impairment. The company's iron, steel, and material production volumes in the first three quarters decreased by 6.63%, 2.81%, and 4.64% respectively compared to the same period last year.

The financial report shows that the company's non-liquid asset disposal income in the third quarter, including the offset of the provision for asset impairment, was 0.281 billion yuan. In addition to asset impairment factors, the company's financial, management, and sales expenses also increased, with financial expenses of 31.068 million yuan, an increase of 29.1034 million yuan compared to the same period last year. With the steel industry facing increasing bank loans due to ongoing 'bleeding,' the increase in financial expenses may become a problem that some loss-making steel companies need to address.

However, due to the strong shareholders and heavy asset background in the steel industry, most companies in the industry currently do not face liquidity issues. Li Jingdong, director, deputy general manager, and chief accountant of the company, introduced at the performance briefing that as of the end of September, the company had cash funds of 1.832 billion yuan and had established long-term stable and good cooperative relationships with multiple financial institutions, obtaining credit lines of over 8.9 billion yuan from nearly 20 financial institutions in total, demonstrating a high level of fund guarantee capability.

Due to the continuous decline in steel prices, the company had previously stated its intention to engage in hedging transactions at the beginning of the year. Wang Baojie, the company's secretary, stated that the business is being executed according to plan, which is beneficial for reducing costs or ensuring product prices. However, based on the company's performance, the effectiveness of the hedging business has not yet been clearly demonstrated.

Regarding the progress of the change of control of Lingyuan Iron & Steel that investors are concerned about, Zhang Peng stated that in October, Chaoyang Municipal State-owned Assets Supervision and Administration Commission signed an agreement with Angang Group. The Chaoyang Municipal State-owned Assets Supervision and Administration Commission will transfer its 7% equity stake in Lingyuan Group to Angang Group free of charge. After the transfer is completed, Angang Group will hold 56% equity stake in Lingyuan Group, becoming the indirect controlling shareholder and actual controller of the company.

The company expects that with the control of the company changing from Chaoyang Municipal State-owned Assets Supervision and Administration Commission to central enterprise Angang Group, the governance system of Lingyuan Iron & Steel will be optimized, information system upgrades will be achieved, and synergy will be realized in the procurement, sales, logistics, R&D, and international trade fields. Through resource sharing, efficiency improvement, and enhanced core competitiveness, the company aims to strengthen its business.