Baosteel’s net profit rose to CNY5.36bn ($826mn) in Q1 FY2021 (January-March), up 248pc from Q1 FY2020 amid robust steel demand and focused cost reduction. Commercial billet production rose to 12.27mn mt in Q1, up 9.4pc from a year ago, while its sales increased to 12.01mn mt, up 13.5pc, according to the company’s quarterly report. Operating income rose to CNY83.607bn up by 39.4pc from a year ago quarter.
Q1 FY2021 was the best quarter since 2019. The company iron output was 11.16mn mt and steel output was 12.858mn mt. Average selling price in Q1 was CNY5,194/mt. Net profit rose by CNY35/mt of steel to CNY470 from the prior quarter. Baosteel’s financial performance benefited from a CNY1.29bn cost reduction in Q1.
Baosteel has also released its annual report for the year 2020. The steelmaker’s net income improved marginally to CNY12.67bn in 2020, up 0.91pc from a year ago, while operating income fell by 2.72pc. Operating income of commercial billets fell by 2.4pc due mainly to a 2.6pc decline in steel volume.
In 2020, production of commercial billets was 45.62mn mt, down by 2.7pc and sales 45.975mn mt down 2.6% from the prior year. Average price of steel was CNY4,276/mt in 2020, while cost of production was CNY3,761/mt.