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Price rally boosts Baosteel’s earnings
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SHANGHAI-LISTED Baoshan Iron & Steel Co expects net earnings to surge between 113 and 121 percent in 2017 from a year ago amid a rally in steel prices as China cuts supply.
Net profit attributed to shareholders last year is set to rise between 10.1 billion and 10.8 billion yuan (US$1.6 billlon-US$1.7 billion) from 2016, as the company's profit margins widened amid steel price increases and its efforts to cut costs, it said yesterday via a public filing. Its net profit in 2016 was 8.97 billion yuan.
In 2017 steel prices nationwide rose as China cut 50 million tons of steel capacity. The rebar price in Shanghai gained 38.1 percent to 4,350 yuan per ton and in Beijing it rose 37.7 percent to 4,090 yuan per ton, said Lange Steel Information Center, a steel industry consultancy.
Baosteel said the price gain has helped it to “reap higher profit margins.”
The steelmaker also attributed the profit growth to higher synergies with Wuhan Steel which merged with Baosteel in 2016 to form parent group Baowu Steel Group Corp.
Several domestic steel firms have also predicted a growth in their profits.
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