Heat Treat Industry News

January 18, 2010

Baoshan Steel Shares Drop After 2009 Earnings Fall (Update1)

Jan. 18 (Bloomberg) -- Baoshan Iron & Steel Co., China’s biggest steelmaker, dropped to the lowest in almost a month in Shanghai trading after full-year net income fell 11 percent to 5.75 billion yuan ($842 million).

Baoshan Steel fell as much as 2.5 percent to 8.46 yuan today in Shanghai, the lowest intraday since Dec. 24, and traded at 8.50 yuan at 10:24 a.m. local time. The benchmark Shanghai Composite Index fell 0.5 percent.

Average Chinese steel prices fell 26 percent to 3,729 yuan a metric ton last year from 5,014 yuan in 2008 as the worst global recession since World War II slashed overseas demand. China’s 4 trillion yuan stimulus helped the steelmaking industry return to profit in May after seven straight months of losses.

Fourth-quarter profit probably was 2.71 billion yuan based on figures derived by deducting nine-month data from the full- year profit in the company’s preliminary earnings statement released Jan. 16. That compares with a 6.03 billion yuan loss a year earlier.

A Bloomberg survey of 26 analysts had a mean forecast of 5.13 billion yuan for Baoshan Steel’s 2009 profit. The steelmaker didn’t provide a reason for the earnings performance in its preliminary statement.

--Helen Yuan. Editors: Richard Dobson, Andrew Hobbs.

To contact the Bloomberg News Staff on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

Last Updated: January 17, 2010 21:49 EST

SOURCE: Bloomberg News

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