Wuhan Steel's profit up 20 pct in 2010
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China's major steelmaker Wuhan Iron and Steel Group would likely see a 20-percent rise in profits in 2010, despite rising production costs, the company said in a statement Friday.
Wuhan Iron and Steel Group is the state-owned parent of Shanghai-listed Wuhan Iron and Steel Co. Ltd., the country's third largest steel mill. The group's profit is expected to reach 3 billion yuan (455 million U.S. dollars) this year.
Sales revenue rose 32 percent from the previous year to 185 billion yuan, compared with the full-year target of 150 billion yuan, according to the statement.
The steelmaker produced 34.5 million tonnes of iron, up 16.97 percent year on year. Steel output grew 20.55 percent to 36.58 million tonnes, and steel products increased 22.63 percent, reaching 35.83 million tonnes.
Steel prices dropped in the second half of the year, due to weak demand from the automotive and real estate industries, while high prices of iron ore, coal and electricity pushed up production costs, said Ji Liangde, analyst of Steelinfo.com.cn, a website dealing with China's steel industry information.
It wasn't easy for Wuhan Iron and Steel Group to perform so well, he added.
Deng qilin, general manager of Wuhan Iron and Steel Group, said the 2006-2010 period witnessed the fastest pace in history in the group's expansion, technological advances and "going-out" strategy.
In 2010, the steelmaker sold 4 million tonnes of newly-developed more profitable products, including high-end silicon steel used to make large voltage transformers.
The steelmaker also received hundreds of thousands of tonnes of iron ore concentrate from the overseas mines in which it had invested. The steelmaker has partnership contracts with Brazil-based EBX and Montreal-based Consolidated Thompson with an eye to improving iron ore self sufficiency.
Wuhan Iron and Steel Group, established in 1955 in the central Chinese city of Wuhan, became a world top 500 company in 2010 and aims to raise its iron and steel sales to 250 billion yuan by 2015, said Deng.
