Baoshan Iron & Steel Says 3Q Net Profit Up

SHANGHAI, China – Baoshan Iron & Steel Co., the unit of China’s largest steel maker with shares traded in Shanghai, reported that its third-quarter net profit jumped 41 percent from a year earlier as core revenue more than doubled.

The Shanghai-based company’s net profit rose to 3.31 billion yuan ($409 million) in the July-September period from 2.34 billion yuan ($289 million) a year earlier.

Baoshan Iron & Steel, whose parent company is Baosteel Group, saw its core revenue surge to 34.5 billion yuan ($4.3 billion) from 14.5 billion yuan ($1.8 billion), the company reported late Sunday.

Many weaker steelmakers are being pressured, however, as production capacity grows at a time when demand is flattening and prices are falling.

Last week, the country’s Iron and Steel Association urged major steel producers to cut output by 5 percent in the fourth quarter of this year to help relieve pressure on prices.

Baosteel, the country’s biggest steelmaker, has announced plans to boost its own steelmaking capacity to 30 million tons from the current 22 million tons over the next few years. The company aspires to become one of the world’s top three steelmakers by 2010, with annual output of up to 60 million tons.

Baosteel holds 75.5 of Baoshan Iron & Steel, one of a number of Chinese companies that have undergone a share-restructuring process to bring government-held nontradable stock into the market.