*
Baosteel's Q1 net profit down 50.6% y/y
*
Higher material costs, weak demand weighed on
profitability
(Adds detail, background)
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
($267.27 million) 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," the company said.
China's steel output rose 6.1% on the year to 261.56 million
tonnes over January-March, according to government data released
this month, after mills ramped up production in anticipation of
much more robust demand.
Apparent steel consumption reached 243.42 million tonnes in
the past quarter, officials from the China Iron and Steel
Association (CISA) said in a briefing.
The company 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 about the
surge in iron ore prices.
The industry association has also urged steelmakers to cut
production amid looming oversupply.
Baosteel produced 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.
($1 = 6.9218 Chinese yuan)
(Reporting by Amy Lv and Dominique Patton in Beijing; Editing
by Robert Birsel)
