On October 27, Anhui Province-based Chinese steelmaker Magang has released its financial report for the third quarter of 2009, indicating a minor rise of two percent in its net profit, compared to corresponding period the previous year.
Accordingly, in the third quarter of this year, the company registered a total turnover of RMB 14.405 billion ($2.11 billion), down 27.51 percent year on year. Meanwhile, its net profit for the period in question was up by two percent, reaching RMB 802 million ($117.43 million). Furthermore, the steel producer's sales revenues during the first nine months this year totaled RMB 37.83 billion (5.54 billion), while its net profit came to RMB 6.92 million ($1.01 million).
During the third quarter this year, steel prices continued to climb following certain improvement seen in steel demand in the international market. Although the domestic demand for steel products grew as a result of the fast development of Chinese economy, steel production expanded quickly, causing the situation of supply sharply exceeding demand. Meanwhile, steel prices in China bounced up in July and then plummeted from mid-August to September, against the relatively high costs of raw materials. In this context, steel producer's net profit shrunk significantly.