Baoshan Iron and Steel Co., Ltd. (Baosteel), a listed subsidiary of China Baowu Group, reported a net profit of 11.94 billion yuan ($1.68 billion) in 2023, down 2% year on year, according to the company's annual performance report.

Operating revenue came in at 344.5 billion yuan last year, down 6.3% from the preceding year, primarily attributed to a significant drop in sales prices, the company said. The earnings per share fell 1.8% on the year to 0.54 yuan.

In 2023, steel prices declined steeply amid weak fundamentals. This, coupled with elevated cost of materials such as iron ore, led to low profitability across the steel industry. Key monitored steel mills achieved profits of 85.5 billion yuan last year, down 12.5% from the previous year, showed data from the China Iron and Steel Association.

Facing reduced profitability and widely recognized challenges for the industry in the long term, Baosteel has found a way out by stepping up efforts to explore the overseas market. In 2023, the company achieved a record high in export orders in 2023.

During the first quarter of this year, the company received export orders totaling 1.52 million tonnes, which was far ahead of schedule, playing a significant role in helping the net profit growth switch to positive.

Baosteel got a net profit of 1.93 billion yuan from January to March, up 4.4% year on year, the company said. Its operating revenue reached 80.81 billion Yuan, rising 2.81% on the year, and the earnings per share increased by 12.5% to 0.09 yuan.

Baosteel produced 118.78 million tonnes of iron and 130.95 million tonnes of steel in the first three months, and commercial billet sales reached 12.52 million tonnes.

For 2024, the company aims to produce 49.06 million tonnes of iron and 51.50 million tonnes of steel, and sell 52.22 million tonnes of commercial billet. The operating revenue is targeted at 330.2 billion yuan, with operating costs estimated at 303.4 billion yuan.

However, Baosteel acknowledged challenges would persist such as the sluggish real estate sector, slow export demand and the existing oversupply.

As a key steel producer in China, Baosteel possesses major manufacturing bases such as Shanghai Baoshan, Wuhan Qingshan, Zhanjiang Dongshan and Nanjing Meishan. It is the world's key carbon steel producer with a broad spectrum of categories.

(Writing by Riley Liang  Editing by Alex Guo)
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