December 02, 2008

Maanshan anticipates price hikes

China Daily reported that Maanshan Iron & Steel expects better earnings in the first half as it has passed some of its rising costs onto customers.

Mr Su Jianggang director and general manager of Maanshan Iron & Steel said "We expect the iron ore prices to rise further, so we have raised the product prices already. He said that "The first quarter earnings are comparatively good as we have raised product prices in advance."

He added that "The prices this month are higher than in March and with product prices going up, the second quarter earnings should be maintained despite the high material costs".

Mr Hu said however, the earnings in the second half of this year are difficult to predict. Currently 80% of the iron ore that the firm needs is from imports and the ore prices may rise further in the second half.

He said when he was asked whether the firm will invest in iron ore businesses to ensure a stable raw material supply. "We know that self sufficiency of iron ore is an advantage, and we are considering iron ore investments. But overseas investments are a sophisticated issue and take time."

Maanshan Iron & Steel reported recently a meager of 3% rise in its 2007 net profits to CNY 2.47 billion despite a robust 43% jump in sales to CNY 49.5 billion. Huge costs in iron ore, as well as mild hikes in the price of steel were attributed to the sluggish results.