News Room - Steel Industry

Posted on 28 Oct 2009

Maanshan Steel Third-Quarter Profit Rises on Stimulus

Maanshan Iron & Steel Co., the second-biggest Chinese mill listed in Hong Kong, said third- quarter profit rose 2 percent after China's stimulus package revived demand.

Net income rose to 802.3 million yuan ($117 million), or 0.1042 yuan a share, in the three months ended Sept. 30, from 786.7 million yuan, or 0.113 yuan a share a year ago, according to a company statement to the Shenzhen stock exchange. Sales dropped 28 percent to 14.4 billion yuan.

Chinese steel prices plunged from a record set on June 5, 2008, as the recession slashed exports and domestic demand, forcing the industry to post seven-straight months of losses starting October. The government is spending 4 trillion yuan to bolster the economy.

"Demand recovered in the period with steel prices gradually climbing," the company said in the statement.

Maanshan Steel fell 2.1 percent to close at HK$5.09 in Hong Kong before the announcement. The stock has gained 84 percent this year, lagging a 54 percent gain in the benchmark Hang Seng Index.

Anhui province-based Maanshan posted losses in the first half of this year and the second half of last year.

Benchmark steel prices in China averaged 3,892 yuan a metric ton in the third quarter this year, down 30 percent from 5,524 yuan for the same period a year earlier, according to Beijing Antaike Information Development Co. Prices reached 4,423 yuan, the highest this year, on Aug. 4.