Aug. 21 (Bloomberg) -- Angang Steel Co., China's third- biggest steel producer, reported a 24 percent gain in second- quarter profit because of higher metal prices.

Net income rose to 2.4 billion yuan ($316 million) from last year's 1.94 billion yuan, based on Bloomberg's calculations subtracting results from the first quarter from the first half announced today. Angang's company Secretary Fu Jihui couldn't be reached for comment on the derived numbers. Sales climbed to 17 billion yuan from 12.9 billion yuan.

Steel prices in China, producer of a third of the world's steel, rebounded after the government tightened loans to curb excess output growth. Merrill Lynch & Co. and Goldman Sachs Group Inc. are among analysts that have raised their ratings on Chinese steel stocks such as Angang Steel and Baoshan Iron & Steel Co. on an improved earnings outlook.

Angang Steel's China-listed shares rose 5 percent to 30.15 yuan in Shenzhen. The stock has surged 196 percent this year. The company's Hong Kong-listed shares gained 5.8 percent to HK$21.05.

Steel prices in China have risen about 5.7 percent this year compared with a year earlier.

For the first half, profit rose 55 percent to 4.8 billion yuan, the Anshan, Liaoning province-based steelmaker said in a statement to the Shenzhen stock exchange, citing domestic accounting standards.

To contact the reporter on this story: Theresa Tang in Hong Kong at ttang3@bloomberg.net

Last Updated: August 21, 2007 08:19 EDT