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Chinese steel giant BaoSteel H1 net drops by 15pct on weak steel prices

Baoshan Iron & Steel Company Limited, China’s biggest listed steelmaker by stock market value, posted a 14.8% fall in H1 net profit reflecting weak prices and slackening demand growth. 

It’s net profit dropped to CNY 3.15 billion from 3.7 billion in the same period last year.

Based on its H1 results, Baosteel’s profit in the April to June quarter was CNY 1.75 billion down 15.9% from year ago and marking a second straight quarter of falling profits. Net profit in the Q1 fell 7.2% from year ago to CNY 1.5 billion.

China’s steel sector is facing its biggest challenges since the global financial crisis of 2008, as mills deal with heavy debt loads, chronic oversupply and mounting environmental protection costs. Beijing’s move to rein in the construction sector, the main driver of the country’s steel consumption, as well as its shift away from infrastructure investments, have also has caused demand growth to slacken, casting doubts on the outlook for the two commodities.

Source – Reuters

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