China Angang Steel H1 Net Profit Rises 276Pct

China’s leading steelmaker Angang Steel Co., (000898.SZ/00347.HK) said Tuesday its net profit for the first half year rose 275.94 percent to 2.75 billion yuan from a year earlier

China’s leading steelmaker Angang Steel Co., (000898.SZ/00347.HK) said Tuesday its net profit for the first half year rose 275.94 percent to 2.75 billion yuan from a year earlier.

Operational revenue covering January ~ June period was around 44.04 billion yuan, up 46.59 percent. Earnings per share stood at 0.38 yuan.

"The profit surge in the first half is mainly due to the pick-up of domestic steel market and the company’s unique pricing model. The results were in line with markets’ expectations,” said Wang Zhe, a CITIC building researcher.

65 percent to 70 percent of the ores used by Angang Steel come from its parent Anshan Iron and Steel Group Corp. and are settled at an average CIF of the imported iron ore concentrates for the last half year, plus railage and price adjustment. The sluggish connected transaction pricing mechanism partly boosted the recovery, analysts say.

In addition, the fast-expanding output in its Bayuquan mill largely attributed to the company’s production, according to the half-year results.

Meanwhile, Wang Zhe holds concerns over its earning capacity for the third quarter. Iron ore costs for the third quarter would rise 370 yuan per ton, which would make its further gloomy, he said.