Baosteel posts 38 percent decline in net profit for H1

Friday, 23 August 2019 15:25:39 (GMT+3)   |   Shanghai
       

Shanghai-based Chinese steelmaker Baoshan Iron and Steel Co. Ltd (Baosteel) has for the first half of the current year announced an operating revenue of RMB 140.876 billion ($20.0 billion), down 5.16 percent year on year, and a net profit of RMB 6.187 billion ($0.88 billion), decreasing by 38.19 percent year on year. The main reason for lower profits was the sharp hike in raw material prices starting from February, which impacted the financial performance of all major mills in China.

Baosteel stated that finished steel prices indicated sharp declines in the first quarter, while, bolstered by rises in raw material prices, they showed slight increases in the second quarter. However, high capacity utilization rates in steel industry as of June and slack demand in the same period resulted in further declines in finished steel prices, thereby contributing to the declines in the company’s net profit for the first half. The slowdown in the automotive industry, one of the biggest consumers of Baosteel’s products, impacted the company’s results. 

In the first half of the year, Baosteel respectively produced 22.827 million mt and 24.286 million mt of pig iron and crude steel, just 0.2 percent and four percent above the figures for the first half of 2018. In the first half this year, it sold 23.352 million mt of finished steel, almost in line with the same period last year. The company’s output and sales volumes in the second half are not expected to change much. According to Baosteel’s full-year production forecast, its steel output in 2019 may just fall slightly, by 1.7 percent year on year.


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