Baosteel reports first half earnings

Baosteel reports first half earnings

China's largest steelmaker, Shanghai based Baoshan Iron & Steel Co (Baosteel), announced an almost 50% year-on-year increase in first-half profits thanks to both higher prices and higher output pushed by the rising demand from autos and home appliances. Baosteel's sales increased 72% to RMB 49.1 billion ($6.06 billion) through June of this year. The company reported RMB 7.1 billion ($877 million) net income for the six months ended June 30, up 48% compared to RMB 4.8 billion ($592.8 million) for the first six months of 2004. Meanwhile, net income for the second quarter reached RMB 4.1 billion ($506 million), an 82% year-on-year increase. Baosteel supplies steel for almost half of the automotive and household appliances industries in China. The company raised its prices for these industries around RMB 700/ton (approx $85/ton) for hot rolled coil at the beginning of the first half. However, the company recently announced a price cut effective from September because of the decreasing trend in the domestic markets. In other company news, Baosteel's stock prices have taken a beating in the six months, prompting the company to carry out a buyback program. Baosteel expects a decrease in profits through the second half of the year.