Maanshan sees price of steel going higher
The mainland steel price should turn around after substantial falls in recent years, according to H share Maanshan Iron & Steel.
The firm said it would strive to cut production costs to maintain profitability.
President Zhu Changqiu said the domestic steel price should turn up this year thanks to the region's economic recovery and the mainland's expansionary fiscal policy to develop its western region.
Last year, the price fell 160 yuan (about HK$149.69), or 8.37 per cent, to 1,750 yuan per tonne.
Maanshan managed to return to profit, with a net gain of 13.1 million yuan after the state paid out a 110 million yuan subsidy last year.
The price fall and glut in the domestic steel market were blamed for the H-share counter's 167.9 million yuan net loss the previous year.
The Government planned to order a number of small and inefficient steel works to close down last year to cut the national output to 110 million tonnes from 120 million tonnes previously, but the measures seemed ineffective as output had remained more or less the same.
Mr Zhu said the steel price should turn around this year as Beijing's policy of developing the western region would generate demand for steel.
He said four out of the 10 leading projects approved in the western region were railway construction, which should generate heavy demand for steel.
Mr Zhu said the metallurgy and trade officials had indicated that the domestic steel price in some regions rose this month.
Meanwhile, the improved economic conditions in Asia should benefit the steel-maker's exports.
Mr Zhu said the H share would increase its exports this year and keep improving the product quality.
The firm would increase the proportion of high gross profit margin products in its sales this year, Mr Zhu said.
