What’s new: Baoshan Iron & Steel Co. Ltd. saw profits drop 42.8% last year, due to rising iron ore costs and dwindling steel-product prices, according to its annual earnings report to the Shanghai Stock Exchange on Wednesday.
The company also reported a 43.63% decline of profits in the first quarter of 2020 to 2.31 billion yuan ($326 million) in its quarterly report released the same day. The Covid-19 pandemic has slashed domestic demand and depressed prices, pushing its profits down further.
As the crisis has sent a shock through the global steel industry, demand for Chinese steel will face continued pressure in the second quarter of this year, said the report.
What’s the background: Baoshan Iron & Steel is the listed arm of the world’s largest steelmaker by output Baowu Steel Group Co. Ltd., which has a mammoth production capacity of 90 million tons per year.
Baowu said previously in an industry meeting in February that it could earn 2 billion yuan to 3 billion yuan less in the first quarter of 2020 than the same period last year, due to a 5% drop in sales.
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Contact reporter Lu Yutong (yutonglu@caixin.com)
