Asian major steel makers posted lower profit for January-March. Baoshan Iron & Steel of China posted 37.0% lower net profit at 1.266 billion yuan from same period of 2011. POSCO of South Korea posed 41.2% lower profit and China Steel of Taiwan posted loss for the parent company’s profit before tax. They suffered from high raw materials cost and lower steel price. They expect better demand and price in and after April but the profit improvement could be limited under oversupply.
Baoshan announced on Saturday the lower sales and profit for January-March from same period of 2011. The operating profit was 2.5% of the sales, which was 5.2 percentage points lower than same period of 2011. The raw steel output decreased by 3.6% to 6.365 million tonnes while the steel sales increased by 1.4% to 6.362 million tonnes. The parent company’s profit decreased by 71.1% to 648 million yuan for net profit and by 84.3% to 465 million yuan for operating profit with 16.7% lower sales at 6.87 billion yuan. POSCO’s consolidated operating profit was 4.9% for the sales in January-March, which was 3.4 points lower than same period of 2011 due to halved profit from steel business. China Steel posted profit in March but the quarterly volume decreased by 4.8% to 2.09 million tonnes for steel products output and by 6.2% to 2.14 million tonnes for steel sales in January-March from same period of 2011. Baoshan’s operating profit rate was largest in Chinese steel makers in January-March. But the profit rate was 9.1 points lower than same period of 2010. The leading maker also suffered from oversupply and lower steel price after aggressive expansion by Chinese and South Korean rivals.
