SHANGHAI Three of Chinas biggest steelmakers have warned that they expect poor 2012 earnings, blaming weak demand and lower steel prices amid Chinas economic slowdown last year.
Hebei Iron & Steel Group Co. Ltd. said its net profit could drop by as much as 99 percent, while Anshan Iron & Steel Group Corp. and Magang (Group) Holding Co. warned of net losses.
Chinas steelmakers have all suffered the effects of a volatile market, with the China Iron and Steel Association saying recently that the overall profitability of its members fell 98.2 percent last year to 1.58 billion yuan ($253.5 million).
Hebei Iron & Steel said its net profit would drop to between 13.8 million yuan and 345.7 million yuan ($2.2 million to $55.5 million), a decline of between 75 and 99 percent from more than 1.38 billion yuan in 2011. It blamed weaker demand from downstream industries, as well as an oversupply of steel products.
Anshan said it could fall deeper into the red, anticipating a loss of 4.16 billion yuan ($667.5 billion) for 2012 compared with a 2.15-billion-yuan loss the previous year.
Magang, which is listed on the Shanghai Stock Exchange, said the companys net loss in 2012 could be in a range of 3.72 billion yuan to 3.95 billion yuan ($596.9 million to $633.8 million) in contrast to a 69.58-million-yuan profit in 2011.
A version of this article was first published by AMM sister publication Steel First.