Fri, Apr 12, 2013 - Page 14 News List

China Steel expects to report Q1 profit despite falling sales

By Camaron Kao  /  Staff reporter

China Steel Corp’s (中鋼) sales from January through last month declined 5.76 percent to NT$88.46 billion (US$2.95 billion) year-on-year from NT$93.86 billion a year ago because of lower steel prices, the company said yesterday.

Compared with the previous quarter, last quarter’s revenue rose 5.19 percent from NT$84.09 billion, the company said.

Last month alone, sales were up 26.43 percent month-on-month to NT$31.24 billion, but down 7.82 percent year-on-year.

In the first quarter, the company raised its prices by 3.47 percent, but prices as of end of last month were still lower than a year earlier, China Steel vice president Lin Chung-yi (林中義) said by telephone.

Lin said the company would still report a profit for last quarter because of its efforts to cut costs and lower costs of iron ore, a major raw material.

Grand Cathay Investment Services Corp (大華投顧) analyst Tsai Yen-ling (蔡燕鈴) said China Steel’s performance last quarter was in line with her forecast.

However, as the market sentiment in the first half of this year has not been as positive as expected, Tsai said China Steel was likely to keep its prices for June shipments at their current levels.

The company is scheduled to announce June contract prices for its domestic downstream customers on Friday next week.

“With the weaker-than-expected market demand in Asia, many steel companies in China have kept their prices unchanged,” Tsai said, adding that China Steel was under no pressure to raise prices in view of a recent significant decline in iron ore costs.

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