(Updates with share prices in the fourth paragraph.)
Oct. 24 (Bloomberg) -- Wuhan Iron & Steel Co., the publicly traded unit of China’s fourth-biggest mill, said third-quarter profit gained 24 percent as it increased output and prices rose.
Net income for the three months ended Sept. 30 increased to 413.4 million yuan ($65 million), or 0.04 yuan per share, from a revised 332.6 million yuan, or 0.035 yuan a share, a year ago, the Wuhan, Hubei province-based company said today in a statement to the Shanghai stock exchange. Sales advanced to 26 billion yuan from 21.5 billion yuan.
Wuhan Steel boosted sales to automobile and appliance makers after it started production from a new cold-rolling plant in June 2010. It also completed the acquisition of 77.6 percent of Echeng Iron & Steel Group from its parent in April, increasing steel output.
The shares advanced 2.1 percent to close at 3.36 yuan today in Shanghai, compared with a 2.3 percent gain on the benchmark Shanghai Composite Index. Wuhan’s nine-month profit climbed 16 percent to 1.64 billion yuan from a year ago, the company said today.
The average Chinese prices of hot-rolled coil, a benchmark product, gained 15 percent to 4,803 yuan a metric ton in the third quarter from a year ago, according to researcher Beijing Antaike Information Development Co.
Prices of iron ore, steel’s main raw material, for immediate delivery at China’s Tianjin port climbed 26 percent for the same period, according to The Steel Index. Contract iron-ore prices the Chinese steelmakers paid Vale SA, Rio Tinto Group and BHP Billiton Ltd. stayed near record levels in the third quarter.
Prices in the world’s biggest steelmaking nation started to slump in mid-September as a slowing global economy cut demand in countries including India. Hot-rolled coil prices dropped 8.8 percent last week, the biggest decline since the week ended Oct. 17, 2008, according to Antaike, squeezing profits at mills.
Wuhan Steel expects auto sheet sales to rise 31 percent to 2.1 million tons this year, from 1.6 million tons in 2010, because of the new plant, it said in a statement May 27.
--Helen Yuan. Editor: Rebecca Keenan
To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at email@example.com
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To contact the editor responsible for this story: Rebecca Keenan at firstname.lastname@example.org -0- Oct/24/2011 07:57 GMT