Major Chinese steelmaker Hebei Iron and Steel Group (Hebei Steel) has issued its financial report for the first quarter of the current year.
Accordingly, in the given quarter Hebei Steel's operating revenue totaled RMB 29.1 billion ($4.61 billion), down 10.76 percent year on year, while its net profit amounted to RMB 400 million ($63.40 million), down 35 percent from RMB 556 million recorded in the corresponding quarter last year.
The steelmaker attributed the decline in profit in the first quarter to high costs and softer prices for its product prices.
In addition, Hebei Steel has announced that it produced 1.7765 million mt of iron ore fines in the first quarter, up 27.9 percent year on year. In 2011, Hebei Steel's iron ore fines output had reached 7.0726 million mt, up 24.8 percent year on year, while in 2010 the steelmaker had registered an 8.57 percent year-on-year increase in output to 5.665 million mt.
Due to overcapacity in the iron and steel industry and weak demand in the downstream market, the prices of steel products have not indicated any upticks for a long time, resulting in decreased motivation on the part of Hebei Steel to produce steel products.