Baoshan Iron & Steel Co. Ltd.'s first-half net profit dropped 38.2% year over year to 6.19 billion Chinese yuan because of rising raw material prices and weaker demand from the automobile and construction sectors amid the slowing economy in China and its trade war with the U.S., Reuters reported Aug. 22.
The results were mainly affected by a surge in iron ore prices in the first half period due to supply concerns caused by the Brazilian tailings dam collapse in January and tropical cyclones in Australia.
The company's second-quarter profit fell to 3.5 billion yuan from 4.99 billion yuan in the same period of 2018, according to Reuters.
Production for the first half was somewhat stable at 22.8 million tonnes of iron ore and 24.3 Mt of steel compared to the year-ago period.
Baosteel expects to produce 45.5 Mt of iron and 48.2 Mt of steel for the full year.
Output cuts and other measures imposed by Beijing to curb pollution are still the company's biggest risk, the report said.
As of Aug. 21, US$1 was equivalent to 7.06 Chinese yuan.
