According to the first quarter report released by giant Chinese steelmaker Baosteel on April 29, the company's net profit for the quarter in question reached RMB 89 million ($13.05 million), down 97.7 percent year on year. Baosteel registered output figures of 4.72 million mt of pig iron and 5.126 million mt of crude steel in the first quarter of 2009, achieving sales revenues of RMB 14.48 billion ($2.12 billion), down 30.9 percent year on year.
During the company's 2008 annual general meeting held on April 28, Baosteel president Fu Zhongzhe stated that, under the influence of the economic stimulus package, the prices of rebar and other construction steels began to rise, while a recovery of demand has also been seen for auto sheet and household appliance steel.
Meanwhile, Baosteel chairman Xu Lejiang remarked that due to the recovery of the domestic auto market orders of auto sheet jumped to 140,000 mt in March and 290,000 mt in April.
Commenting on the hot topic of iron ore, Mr. Xu stated that about 98 percent of Baosteel's iron ore usage is dependent on imports, which explains the sharp decrease in the company's net profit in the past year. In the current year, he said, the iron ore price talks have been undergoing difficulties, with no result announced yet. The Baosteel chairman stated that the company favors long-term contract prices instead of an index-linked price, adding that it is time for Baosteel to build good relationships for long-term iron ore supplies when the market is bearish.