Hebei Steel expects lacklustre performance for 2013 on weak steel market
China’s largest steelmaker Hebei Iron & Steel expects its full-year results for 2013 to remain at low levels on account of the weak the steel market last year.
Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
Net profit is predicted to total 115 million yuan ($18.62 million) for 2013, the mill said in a filing with the Shenzhen Stock Exchange on Tuesday April 15. This is close to 2012 levels, when profits slumped 92% year-on-year to 109 million yuan ($17.65 million).
Revenue for 2013 is expected to fall by 1.2% on an annual basis to 110.25 billion yuan ($17.85 billion).
Hebei Steel attributed the weak results to lower steel prices, weak demand and high raw materials prices.
Spot rebar prices in north China fell by 8.9% in 2013, according to Steel First archive.
On the same day, the company also released its forecast for the first quarter of 2014, estimating that net profits could surge to as high as 170 million yuan ($27 million) compared with 44 million yuan ($7 million) a year earlier.
However, the strong result is not due to an improved performance from its steel business, but from changing its asset depreciation period, Hebei Steel said.
Central China-based Valin Steel predicted a loss of between 110 and 150 million yuan ($18-24 million) in Q1 due to the slowdown in economic growth, weak steel prices and slack demand, as well as high steel inventory.
However, Valin said it expects its steel sales to rise more than 20% year-on-year in Q1.
Earlier this year, the mill announced it had swung to a profit of 106 million yuan ($17 million) in 2013 after incurring a loss of 3.4 billion yuan ($530 million) a year earlier, on lower costs and higher sales during the period.