Steel giant delivers strong May rebound

Angang Steel Co Ltd, one of China's top steel producers, delivered a strong performance in May, returning to the black for the month thanks to improved production efficiency and green technology, said Chairman Zhang Xiaogang.

But he warned he was still cautious about the company's June performance, as steel prices continue to fall.

The company reported a loss of 2.15 billion yuan ($341 million) last year, the biggest among the country's listed steel producers.

In the first quarter of this year, it racked up a further 1.89 billion yuan loss, against a net profit of 71 million yuan at the same stage last year.

However, revenues gained from the company's flagship steel project at Bayuquan in Liaoning province, ended in profit in May, for the first time this year, against the general industry gloom brought about by rising raw material prices and less downstream demand, Zhang said.

The project had struggled in March and April, but the net profit in May is a significant success, said Zhang, who declined to release the exact details of its performance.

Elected chairman of the World Steel Association in October, Zhang delivered the upbeat performance update after being awarded the Willy Korf and Ken Iverson Steel Vision Award given by World Steel Dynamics and American Metal Market.

"I don't take the honor for either myself or Ansteel. Rather, this honor belongs to China because of the country's contribution to the world's steel industry," he said.

The Bayuquan steel project, which started operation in 2008, has annual production capacity of 5 million metric tons of steel, 2 million tons of wide and heavy plates and 2.96 million tons of hot rolled plates, and is expected to manufacture more high-end steel products in future.

The steel industry had a total deficit of more than 9 billion yuan in the first quarter of this year, the first time this century the industry as a whole has fallen into the red, according to the China Iron and Steel Association.

The government has just accelerated the approval of a series of infrastructure construction projects including steel projects to boost the economy. However, analysts said it is still too early to evaluate whether they will deliver the desired effect or not.

Contact the writers at dujuan@chinadaily.com.cn and wuyong@chinadaily.com.cn