Baoshan Iron & Steel Co (Baosteel), a major steel maker in China, reported 61.47 percent year-on-year slump in its first-half net profit over the weekend, mainly due to sluggish market conditions.
Baosteel recorded 3.7 billion yuan ($604.58 million) in net profit in the first half of the year on the revenue of 91.6 billion yuan, which was also down 1.84 percent year-on-year, the Shanghai-based company said in a filing posted on the Shanghai Stock Exchange Saturday.
The company attributed its falling profit to growing steel supply during the January-June period. Among 86 large domestic steel companies monitored by the China Iron and Steel Association (CISA), 35 recorded losses in the first six months.
The steel makers' business in the first half was hurt by declining steel prices amid rising production and stagnant steel demand, Qu Xiuli, deputy secretary-general at the CISA, told the Global Times Sunday.
Also on Saturday, Baosteel separately announced a plan to make another 12 billion yuan of investment in its steel project in Zhanjiang, South China's Guangdong Province, fueling concerns over a possible increase in the overcapacity in the sector.
The 10-million-ton steel project, which started construction in May and is expected to begin operation in September 2016, is not far from Wuhan Iron and Steel Group's 10-million-ton high-end steel mill in Fangchenggang port, South China's Guangxi Zhuang Autonomous Region, which is also expected to begin operation in 2016.
Despite risks of competing with each other, the two mills that are designed to produce high-end products are in line with the country's measures to remove outdated capacity and promote industrial upgrade, Wang Guoqing, a senior analyst with Beijing Lange Steel Information Research Center, told the Global Times Sunday.
Overcapacity is a serious problem in China's steel industry, with only 73.4 percent of capacity in the sector being used in 2012, according to the CISA.
Can't wait for the production glut to kick in in 2014 = going to be epic.
Now that we have the LNG glut being sideswiped by US shale gas, capex cliff, TOT landslide things are going to be fantastic when world war four is declared on wages and living standards of Australians to pay for the $30 billion dollar LNP black hole - can't wait.
Any bulls cheer leading for LNP are in for a world of hurt.
Doubt you'll find that the RBA run global LNG prices Mel? Nor those of iron ore?? Nor the price of Chinese made steel??? Not especially anyway. Thought yep, they do seem to be a quite major player in keeping Oz housing prices up.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Doubt you'll find that the RBA run global LNG prices Mel? Nor those of iron ore?? Nor the price of Chinese made steel??? Not especially anyway. Thought yep, they do seem to be a quite major player in keeping Oz housing prices up.
it's great to see you again Herbs
I have long suspected Audas' strong sense of passion stems from house prices - i used to mention the price of money to him but he was insistent that as the cash rate fell further cuts would be ineffective. If Audas is going to buy in the next 3 years i would advise he does it soon as it will only be a matter of time until the action taking place on the other side of town spills over to his area of interest IMHO.
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