Among 20 listed steelmakers who have released their earnings outlook for fiscal year 2008, 19 companies, including major industry players Angang Steel and Shanxi Taigang Stainless Steel, are forecasting that their profits will drop by as much as 50 percent, the official China Securities Journal reported on Monday.
Analysts attributed steelmakers' shrinking profits to the steel price plunge and sliding downstream demand. The lag in price drops of raw materials, and environmental factors such as snowstorms and earthquake also exacerbated the situation.
Five steelmakers expect losses in 2008
Panzhihua New Steel & Vanadium announced that it expects to report a net loss of 430 million yuan for fiscal year 2008, down 145 percent from the net profit of 950 million yuan in 2007. The company cited the natural disasters and the global financial crisis as the main reasons for its negative financial outcome.
Sichuan Changcheng Special Steel, another company under Pangang Group, expected a loss of 350 million yuan, down 1280 percent from last year.
Xining Special Steel, SGIS Songshan, and Guangzhou Iron and Steel also forecast a net loss for fiscal year 2008.
14 companies see shrinking profits
14 domestic steel companies, including major industry players Angang Steel and Shanxi Taigang Stainless Steel announced that they are looking at a shrinking profit for fiscal year 2008.
Angang Steel expects its profit for 2008 to be about 3.42 trillion yuan, down 55 percent from last year. Shanxi Taigang Stainless Steel forecast a net profit of 1.2 billion yuan, marking a decrease of 72 percent from 2007.
Liuzhou Iron & Steel, Jiangxi Changli Automobile Spring, and Gansu Jiu Steel Group Hongxing Iron & Steel expect their profits to drop by 98 percent, 90 percent and 90 percent respectively, compared with that of fiscal year 2007.
Anyang Iron & Steel, Chengde Xinxin Vanadium And Titanium, Laiwu Steel Corporation, Nanjing Iron & Steel, and Xinjiang Ba Yi Iron & Steel all expect their profits to drop by more than 50 percent year-on-year.
Only 1 steelmaker sees rising profit
Fushun Special Steel however announced that the net profit for fiscal year 2008 will increase by over 50 percent compared with that of fiscal year 2007. The company said that the noticeable profit rise was a result of its commercial move to high-value-added products, and lower taxes.
For more details, please read the complete Chinese news coverage here at:
http://paper.cs.com.cn/html/2009-02/02/content_19875282.htm
(China.org.cn by Yan Pei, February 2, 2009)
