China Steel Corp (CSC, 中鋼), the nation’s largest steelmaker, posted a 49 percent drop in third-quarter profit after cutting prices because of weak demand.
Net income declined to NT$4.72 billion (US$158 million) in the three months ended Sept. 30 from NT$9.24 billion a year earlier, according to figures derived from a nine-month earnings report released by the Siaogang District (小港), Greater Kaohsiung-based company yesterday.
That compares with the NT$3.97 billion average of 10 analyst estimates compiled by Bloomberg.
The company joins Pohang Iron & Steel Co (POSCO) of South Korea, the world’s third-largest steelmaker, and Baoshan Iron & Steel Co (Baosteel, 寶鋼), China’s largest steelmaker, in reporting lower earnings as the slowing global economy erodes demand in countries including China and India, squeezing the profits of steelmakers.
CSC cut domestic product prices by 4.2 percent for July and August contracts and by another 1.7 percent for September.
CSC’s nine-month net income fell to NT$20.1 billion, or earnings per share of NT$1.41, from NT$33.1 billion, or NT$2.35, a year earlier, the company said in a statement.
POSCO, based in Pohang, South Korea, on Oct. 21 reported a 75 percent decline in third-quarter profit and said it would lower planned spending for this year, while Baosteel said yesterday its third-quarter net income fell 51 percent from a year earlier, according to a statement to the Shanghai Stock Exchange.
However, Angang Steel Co (鞍鋼), the largest Hong Kong-listed Chinese steelmaker, turned to a profit in the third quarter after provisions made for inventory losses fell.
Angang’s net income was 19 million yuan (US$3 million) in the three months ended Sept. 30, compared with a loss of 178 million yuan a year earlier, the company said in a statement to the Shenzhen Stock Exchange yesterday.
On Thursday, Nippon Steel Corp and JFE Holdings Inc, Japan’s largest steelmakers, cut their earnings forecasts as the global economic slowdown curbs demand for metals used in car manufacturing and construction.
Nippon Steel cut its current profit forecast by 22 percent to ￥180 billion (US$2.4 billion) for the financial year to March next year, according to a statement day from the Tokyo-based company yesterday. JFE reduced its full-year profit forecast by 75 percent to ￥20 billion after a loss in the second quarter.
“A longer-than-expected slump in the steel market is delaying a recovery,” JFE executive vice president Yoshio Ishikawa said at a press conference in Tokyo on Thursday.