Higher prices, cost cuts help major steel mills during H1

Source:Global Times Published: 2016/8/30 22:23:39

Three of China's top steel producers released their first-half reports on Tuesday, which showed relatively sound results that the companies said reflected a recovery in the steel market and the success of cost cuts.

Baoshan Iron & Steel Co (Baosteel) said net profit grew 9.26 percent year-on-year to 3.5 billion yuan ($524 million) in the first half of 2016, according to data released on the official information disclosure website cninfo.com.cn on Tuesday.

Angang Steel Co (Ansteel)'s net profit was up 93.55 percent to 300 million yuan in the first half of 2016, domestic news portal bjnews.com.cn reported on Tuesday.

Wuhan Iron and Steel (Group) Corp (WISCO)'s net profit was down 47.71 percent to 273 million yuan, said the report. But that was an improvement from the first quarter, when net profit fell about 93 percent to 30 million yuan.

WISCO's performance improved thanks to rising prices of iron and steel as well as the contribution of its employees, the company said in its report.

All three producers effectively cut costs to gain profits, according to their financial reports.

Ansteel cut 742 employees in the first six months of 2016 to a total of 37,079 as of June, said the bjnews.com.cn.

Baosteel strongly boosted cost reforms. The company said in its report it had achieved 93 percent of its goals involving cost cutting, but it didn't provide details.

WISCO made progress in slimming down its energy, marketing and management departments.

However, the iron and steel market is still oversupplied and the industry's fundamental situation has not really improved, WISCO said in its report, noting that producers are still burdened with too many staff, too much debt and too many products that aren't competitive.

In the first six months of 2016, China's overall crude steel fell 1.1 percent to 400 million tons, Baosteel's semiannual report showed.

Baosteel and WISCO announced plans to carry out a major restructuring in June, and their shares have been suspended since June 27, the ­Xinhua News Agency reported.

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