Baoshan Iron & Steel Co Ltd (Baosteel), the largest steel producer in China, on Tuesday reported fall in net profit in the first quarter of 43.6% and warned of an even greater drop in income in the first half of 2020, referring to the pandemic of coronavirus.
Net profit of Baosteel in January-March fell to 1.54 billion yuan (approximately $ 217 million) from 2.73 billion yuan a year earlier, according to data the company published on the Shanghai stock exchange.
"In connection with the extension of the holidays and spread of new pandemic coronavirus in the country and abroad, domestic demand for steel products has clearly fallen," said the company, adding that a stable iron ore prices also contributed to lower margins.
According to S & P Global Platts, the basic price index for iron ore with Fe content of 62% rose in the first quarter to 89.0 per ton with 88.61 dollar in the fourth quarter of 2019.
In the first quarter, Baosteel produced 11.1 million tons of iron and 11.8 million tons of steel.
the Company expects demand for sheet steel in the second quarter will continue to decline due to low rates of consumption in the sectors of processing, and also due to high inventory levels, which could limit the range of prices for the purchase and sale and strike profit in the first half.
In 2019 Baosteel net profit fell 42.1% to 12.4 billion yuan, the company has released in the past year 46,87 million tons of steel products of which is 3.62 million tons exported to other countries.
In 2020 it is planned to produce 43,43 million tons of iron and 46,36 million tons of steel, and the total income calculated at 270,4 billion yuan.
