Baosteel profits jump 41% in Q3
China's largest steelmaker, Baoshan Iron & Steel Corporation (
Baosteel), saw a 41 percent year-on-year increase in third quarter net profit thanks to the steel plant acquisitions from its parent company earlier in the year.
The company's net profit increased from RMB 2.3 billion ($284.5 million) in the third quarter of 2004 to RMB 3.3 billion ($408 million) in the third quarter of this year. Sales of the company increased 137 percent year on year to RMB 34.5 billion ($4.27 million). However, the company's profit dropped from the RMB 4.1 billion ($507.2million) of the previous quarter due to excessive domestic supply, a sluggish market and dropping prices.
In April,
Baosteel bought steel plants from its parent company, Baoshan Iron & Steel Group. The acquisitions expanded
Baosteel's capacity 56 percent.
Baosteel has cut its prices by approximately 10 percent for the fourth quarter. Therefore, profits may fall further.