Angang Steel Rebounds to First-Half Profit as China Stimulus Boosts Demand
Angang Steel Co., China’s biggest Hong Kong-traded steelmaker, may post a loss in the third quarter after prices fell and raw-material prices gained.
Angang Steel may suffer a loss of as much as 480 million yuan ($71 million) or a profit of as much as 120 million yuan in the three months ending September 30, according to figures derived from the company’s projected nine-month profit today. That would be a loss for the first time in five quarters.
Steel prices in China fell as much as 17 percent from April as the government introduced measures to curb property speculation. Slowing demand led about 40 percent of steelmakers in the country to idle plants or put them on maintenance, the China Iron and Steel Association said.
“Steel prices in the third quarter fell,” Angang Steel said in the statement.
Angang Steel rose 0.8 percent to HK$11.96 at the 4:00 p.m. close in Hong Kong. The stock has dropped 30 percent this year on concern property curbs by the government will hurt construction demand for steel. The benchmark Hang Seng Index climbed 0.1 percent.
Spot prices for 62.5 percent content iron ore arriving at Tianjin port averaged $145.20 a metric ton in the first half, a 58 percent increase from the second half of last year, according to the Steel Index. Iron ore is a key steelmaking ingredient.
Angang Steel rebounded to a first-half profit of 2.78 billion yuan, from a loss of 1.55 billion yuan a year ago, according to its earnings statement today, citing international accounting standards. The company forecast a nine-month profit of 2.3 billion yuan to 2.9 billion yuan.
The company increased crude-steel output by 16 percent to 10.6 million metric tons in the first half, it said. Production at the new Bayuquan plant jumped 66 percent to 3.19 million tons, from a year ago, it said.
Exports surged almost fivefold to 810,000 tons in the first half from 170,000 tons a year ago, Angang Steel said. Sales volume of cold-rolled automotive sheets climbed to a record 801,600 tons in the first half.
To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at email@example.com