Net profit at Baosteel Group, one of the top Chinese steel makers, dropped 32 percent last year to 23 billion yuan, according to the state-run Shanghai Securities News on Wednesday.
Steel demand shrank rapidly in the last few months of the year, forcing the group, which includes the listed unit Baoshan Iron & Steel, to idle some furnaces in the final quarter, the newspaper quoted an unnamed senior Baosteel official as saying.
Baosteel's output in the fourth quarter fell about 30 percent, the official was quoted as saying. The listed unit is due to release its 2008 earnings report in late March.
Other large steel groups also suffered from falling demand and tumbling steel prices in the fourth quarter, the newspaper noted.
Gross profit at Wuhan Iron & Steel Group slid 18 percent to 7.6 billion yuan, or $1.1 billion, last year, the newspaper quoted an unnamed source in the group as saying.
The group cut as much as 28 percent of its production at one stage last year and some of its furnaces are still idle, the newspaper added.
Hebei Iron & Steel Group, which was formed last year, cut 25 percent of its production in the second half and still has 11 furnaces idle, the newspaper reported. It said Shandong Iron & Steel Group's 2008 profit fell more than 50 percent to about 3.5 billion yuan.
China's government will discuss concrete steps this week to support its auto and steel industries, which could include tax cuts and incentives to promote consolidation.
China had steel production capacity of 660 million tons by the end of 2008, the China Securities Journal reported.
Source: International Herald Tribune
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