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Net profit was 1.1 billion yuan ($176.3 million) compared with 1.8 billion yuan in 2011, the company said in an annual report filed with the Shenzhen Stock Exchange on Friday April 19.

Sales revenue at China’s biggest stainless steel producer was up 7.6% on the year at 103.5 billion yuan ($16.6 billion).

Economic growth slowed in both the domestic and overseas markets, causing a sharp drop in demand for steel products which led to a price slump, Taigang said.

East China rebar prices fell by 1,100 yuan ($176) per tonne over the year, hitting a year-low of 3,290 yuan ($527) per tonne in September. This compares with levels of 4,400 yuan ($705) per tonne at the start of 2012.

Stainless 304 cold rolled coil prices dropped from 20,000 yuan ($3,206) per tonne in January 2012 to 18,000 yuan ($2,885) per tonne in December. Prices also hit a year-low of 17,500 yuan ($2,805) per tonne in September.

Taigang’s stainless segment performed better than its carbon steel business in 2012.

Its stainless steel business recorded an 11.4% drop in sales revenue while its carbon steel segment fell 15.9%, according to the report.

Its stainless steel segment’s gross profit ratio rose 1.19% to 11.48% for the year, but that of its carbon steel business slid 0.4% to 12.25%.

Taigang will focus on optimising its product structure and strengthening its competitiveness in 2013.

But the company expects mills to continue to face low profit margins or even losses due to the overcapacity in the steel industry and the price volatility of raw materials.

Taigang produced 10.1 million tonnes of crude steel in 2012, including 3.1 million tonnes of crude stainless steel, up 2.2% and 2.8% on the year, respectively.

The company aims to raise its crude steel output to 11 million tonnes and that of stainless steel to 3.4 million tonnes in 2013.

Taigang also released its first-quarter report on Friday, which showed its revenue rising 11% on the year to 25.1 billion yuan ($4 billion) and net profit increasing 37.9% in the same comparison to 255 million yuan ($40.9 million).