Shagang’s profit surges 114% in Q3 on steel price recovery

China’s largest private-owned steelmaker Shagang reported a net profit increase of 113.9% on the year for the third quarter of 2013.

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The gain was attributed to the depressed market over the same period last year.

Shagang’s profit in July-September 2013 totalled 6.1 million yuan ($1 million), according to its financial results statement to the Shenzhen Stock Exchange on Tuesday October 29.

Its profit for the first nine months of 2013 stood at 14.9 million yuan ($2.4 million), up 251.6% year-on-year.

However, its revenue for the same period saw an 11.8% drop on the year to 7.96 billion yuan ($1.3 billion).

Shagang attributed its strong performance to steel price recovery this year compared with 2012.

“The market fluctuated greatly in 2012, especially in the third quarter. The company recorded losses in Q3 2012 due to the sharply declined steel prices,” it said.

Spot rebar prices in eastern China declined from 3,820-4,000 yuan ($624-653) per tonne on July 6 2012 to the bottom of 3,290-3,450 yuan ($537-563) per tonne on September 7 2012, according to Steel First price archive.

Shagang is expecting a profit rise this year. Its projected total profit for 2013 is 26-33 million yuan ($4-5 million), which translate to a 15-45% year-on-year increase.

The steelmaker had a net profit of 22.7 million yuan ($3.7 million) in 2012.

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