1 Apr 2010 10:04

Baosteel's net profit down 9.95 pct in 2009

Shanghai. April 1. INTERFAX-CHINA - Baoshan Iron and Steel Co. Ltd. (Baosteel) announced on April 1 that it generated sales revenue of RMB 148.33 billion ($21.73 billion) and net profit of RMB 5.82 billion ($852.61 million) in 2009, down 25.96 percent and 9.95 percent year-on-year respectively.

The Shanghai Stock Exchange-listed subsidiary of China's leading steelmaker Baosteel Group, the company attributed the drops to the fall in steel product prices caused by the global economic downturn and rising raw material prices in the second half of 2009.

It stated in its annual report that steel product prices in 2009 were lower than the average prices of steel products in the first three quarters of 2008, and that prices of raw materials, such as coking coal, coal, scrap steel and ferroalloy have also risen since the third quarter of 2009. Additionally, steel product exports fell drastically in 2009 due to shrunken demand from the international market, trade barriers and volatile exchange rates.

The company anticipates that the global steel industry will continue to recover slowly, and rebounding market demand from the automotive and home appliance industries, as well as rising production costs, will bolster steel product prices in 2010.

Baosteel aims to produce 23.49 million tons of pig iron and 26.39 million tons of crude steel in 2010.