December 02, 2008

Ansteel to produce 18 million tonnes of steel in 2008

According to Mr Fu Jihui director of Ansteel's the company initially plans to produce over 18 million tonnes of steel and 17 million tonnes of steel products in 2008.

He said that the CNY 22.6 billion Bayuquan project will start operations in the later half of 2008 with an annual capacity of 5 million tonnes. Ansteel sold its products at CNY 4,689 per tonne in the first quarter, up 11% and was expected to grow 10% in the second quarter.

The company will reduce exports from 2008 as gross profit margin from exports could be 3 percentage points lower than that from domestic sales.

He added that it purchases 75% of iron ore necessary from its parent company and remaining 25% from overseas, most of them are bought under long term contracts. It purchased iron ore at CNY 790 per tonne in the first quarter and coking coal at CNY 880 per tonne with a further rise of CNY 100 per tonne to CNY 200 per tonne for the latter in the second quarter.