Car makers’ demand lifts Baosteel’s net
BAOSHAN Iron & Steel Co, China’s biggest steel mill, said first-half profit surged 80 percent after it increased production and prices to meet demand from auto makers such as Volkswagen AG and General Motors Corp.
Net income gained to 8.16 billion yuan (US$1.1 billion), or 0.47 yuan a share, in the six months ended June 30, from a revised 4.53 billion yuan, or 0.26 yuan, a year earlier, Shanghai-based Baoshan Steel said yesterday in a statement. A Bloomberg News survey of nine analysts had a median estimate of 8.23 billion yuan for the profit.
“Baosteel is taking advantage of its long-term auto customers and steady prices of products compared with its domestic rivals,” Lu Yizhen, who helps manage about US$640 million at CITIC-Prudential Fund Management Co in Shanghai, including Baoshan shares, said before the earnings.
Baoshan Steel, Nippon Steel Corp and Posco make more steel for auto makers in China, which passed Japan last year to become the world’s second-largest vehicle market. Auto sales may rise 15 percent this year, according to the China Association of Automobile Manufacturers.
Baoshan Steel has said it’s a main supplier to the China units of Volkswagen and GM.
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