Baoshan Iron & Steel Co Ltd (Baosteel), China's biggest listed steelmaker by market value, posted a 0.45 percent fall in its 2014 net profit, logging a second straight year of declines as an easing Chinese economy sapped demand.
Net profit of Baosteel, whose peers include Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd and Anyang Iron & Steel Inc, reached 5.79 billion yuan ($932 million), inching down from 5.82 billion from a year ago.
"The steel sector remains extremely competitive in 2015 and so, demand and supply will slow in tandem," Baosteel said in a statement. "The steel sector will still suffer from oversupply and it will be a new normal for companies' operations to just eke out small profits."
Smaller steel maker Gansu Jiu Steel said in January it expected a profit of about 40 million yuan in 2014 after logging a net loss of 2.34 billion the year before, as it upgraded its technology and adjusted its product mix.
China's steel sector, the world's biggest, is struggling with heavy debts and low profits, due to slower demand growth as the world's No.2 economy loses strength, combined with chronic overcapacity, leaving many small mills to close.
Moreover, Beijing's anti-pollution campaign to tackle heavy smog also increased environmental costs by steel mills, although large state-owned mills are expected to benefit from the closure of smaller inefficient players.
Iron ore prices .IO62-CNI=SI plunged 47 percent last year, due to a growing supply glut from Australia and Brazil.
Source: Reuters
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