Guangdong Province-based Chinese steel rolling and processing company SGIS Songshan Co., an affiliate of Guangdong-based Shaoguan Iron and Steel Co. (Shaogang), has announced that it expects to register a net profit of RMB 860 million ($136.6 million) for the first quarter of the current year, up 411.42 percent year on year.
The company stated that at the beginning of the year, due to production restrictions in northern China and inventory replenishment during the winter season, finished steel prices in the Chinese domestic market moved at relatively high levels. After the Chinese New Year holiday, demand has not recovered quickly to the good levels anticipated by market players, resulting in declines in finished steel prices. However, the company has adopted effective measures, for instance, keeping low inventory levels, lowering costs and improving product structure, to ensure good profitability in the first quarter of the year.