Thu, Aug 30, 2007 - Page 11 News List

China Steel gains 57 percent in Q2

BLOOMBERG

China Steel Corp (中鋼), the nation's largest steelmaker, posted a 57 percent gain in second-quarter profit after prices of the alloy climbed.

Net income rose to NT$13.1 billion (US$396 million) in the three months ended June 30, compared with NT$8.37 billion a year ago, according to figures derived by Bloomberg from the half-year result announced yesterday by the Kaohsiung-based company.

China Steel is boosting capacity and increasing prices to meet demand from shipbuilders and building companies in Taiwan, where the economy grew faster than expected this quarter.

China Steel shares rose 3 percent to close at NT$41.5 in Taipei after the earnings announcement, reversing earlier losses. The stock has advanced 24 percent this year, compared with a 10 gain in the benchmark TAIEX.

Profits are rising at steelmakers as prices increase. Arcelor Mittal, the world's largest mill, reported a 50 percent jump in second-quarter profit after raising prices in the US and Europe. Posco, Asia's third-largest producer, posted a 55 percent advance.

Second-quarter sales at China Steel rose 21 percent to NT$51.1 billion.

First-half net income rose 89 percent to NT$26.2 billion, or NT$2.38 per share, the steel-maker said in a filing yesterday. Sales climbed 25 percent to NT$100.2 billion, according to monthly filings.

The company increased prices for local customers by 3.2 percent from the first quarter after a 0.6 percent gain in the January-March period.s

Last week, it announced a 0.48 percent average increase for the fourth quarter on rising demand from shipbuilders.

China Steel plans to buy a 1.09 percent stake in Yodogawa Steel Works Ltd for about ?1.21 billion (US$10.5 million) to strengthen ties with the Japanese customer.

The purchase of 2 million shares was approved by China Steel's board yesterday, the company said in a statement to the Taiwan Stock Exchange.

"We're trying to cement relations with the customer as we add new capacity,'' China Steel Executive Vice President Chung Lo-min (鍾樂民) said by telephone.

Yodogawa Steel, based in Osaka, buys hot-rolled steel from the company. It makes surface-treated steel sheets and plates and maintains buildings.

The stock fell 1.4 percent to ?583 in Tokyo yesterday.

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