Wuhan Iron and Steel Co's earnings plunged 76 percent in the third quarter as a global recession hurt steel demand and prices, and it forecast its full-year profit may drop more than 50 percent.

Explaining its gloomy outlook for full-year earnings, the company said the global economy hasn't recovered substantially and the rebound in the domestic steel industry is clouded by uncertainties.

Net income for the July-September quarter was 546.6 million yuan (US$80 million), against 2.26 billion yuan a year earlier, the steel maker said in a stock exchange filing over the weekend. Sales in the third quarter shrank 33 percent to 13.9 billion yuan, it said.

The steel maker reported a net profit of 5.19 billion yuan in 2008.

China Jianyin Investment Securities analyst Chu Xueliang wrote in a note that Wuhan Steel's results were lower than expected but the industry could recover gradually next year.

Steel prices in China have fallen nearly 20 percent due to overcapacity. "In the fourth quarter, steel prices would be stuck in range-bound trade and recover very slowly," Chu said. "So the company will still be hard pressed on earnings in the fourth quarter."

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