Chinese steelmaker Angang Steel has stated that its crude steel and finished steel volumes are expected to increase by 10 percent in 2010, but that the profits gained from increases in output and in steel prices may be eaten up if iron ore prices keep on rising.
Angang Steel board secretary Fu Jihui said on April 21 that the company plans to produce 22 million mt of crude steel and 20.98 million mt of finished steel in the current year, up 9.6 percent and 10.4 percent respectively than the volumes of 20.07 million mt and 19 million mt recorded in 2009.
Meanwhile, Angang Steel chairman and China Iron and Steel Association (CISA) vice chairman Zhang Xiaogang stated, "This year iron ore cost price increase will put great pressure on costs for all steelmakers worldwide."
Zhang Xiaogang said that the iron ore price has doubled in the past year, higher than the CISA's expectation.
"In the first months of this year, steel price increases counterbalanced the cost increase. The iron ore price increase in April and May may leave some profit margin for steelmakers. But if the raw material price increases too rapidly, the profit margin will be totally eaten up," the Angang Steel chairman said.