- Australian steelmaker cites turnaround in prices across Asia
- Producer’s shares advance to the highest close in five years
BlueScope Steel Ltd., Australia’s largest steelmaker, said that it expects to report stronger than forecast full-year earnings amid improved prices in Asia. The producer’s shares rose to a five-year high.
Underling earnings before interest and tax in the year to June 30 are likely to be about A$570 million ($435 million), the Melbourne-based producer in a statement said Thursday. That would be an 89 percent advance from a total of A$301.8 million a year earlier.
Steel has rallied in Asia rallied this year, with rates in China surging about 40 percent after policy makers in the nation pledged to support growth and as the property sector rebounded. BlueScope’s improved performance is a result of the turnaround in prices, with better margins at the company’s North Star and Steelscape units, the producer said.
BlueScope rose 7.2 percent to A$7.85 in Sydney, the highest since May 2011. The producer has advanced 77 percent this year. It will report confirmed full-year earnings in August, it said.
The gains in steel prices probably aren’t sustainable as China’s industry continues to face longer-term challenges including overcapacity, according to National Australia Bank. On Thursday, National Development and Reform Commission spokesman Zhao Chenxin said that the steel oversupply situation in the country won’t change in the short term.