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Baosteel's Q1 net profit down 50.6% y/y
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Higher materials costs, weak demand weighed on
profitability
By Amy Lv and Dominique Patton BEIJING, April 27 (Reuters) - China's biggest listed steelmaker, Baoshan Iron & Steel Co , on Thursday reported a 50.6% fall in first-quarter net profit due to high raw material prices and weaker demand. The company, known as Baosteel, said in a filing to the Shanghai Stock Exchange that it earned 1.85 billion yuan during January-March, down from 3.7 billion yuan in same period of 2022. Baosteel is a subsidiary of the state-owned China Baowu Steel Group, the world's largest steelmaker. The producer's first-quarter sales revenue fell 8.6% on an annual basis to 78.6 billion yuan. "Oversupply in the steel market continued in the first quarter and the steel sector remained under intense pressure; the iron ore price continued the uptrend," said the company. It added that Platts' 62% iron ore index climbed by 26.8% in the first three months of the year from the last quarter of 2022, while coking coal prices hovered at a high level. China's state planner issued repeated warnings earlier this year about the surge in iron ore prices. The industry association has also urged steelmakers to
cut production amid looming oversupply.
Baosteel churned out 11.87 million tonnes of iron and 12.83 million tonnes of steel in the first quarter. The steelmaker also said its net income in 2022 slumped 48.4% to 12.19 billion yuan. Its 2022 revenue stood at 367.78 billion yuan, up 0.9% year-on-year, the filing showed.
(Reporting by Amy Lv and Dominique Patton in Beijing)
