China Baosteel flags lower profitability on commodity volatility

Surging prices of alloys, nonferrous metals and energy have "significantly" dented the profitability for Baoshan Iron & Steel Co Ltd, the top Chinese steelmaker said, without providing further details of the impact.

Due to carbon and environmental curbs and the Russia-Ukraine conflict, the prices of commodities scaled fresh highs and affected profitability, the steelmaker said in a Shanghai Stock Exchange filing released on Wednesday night.

The steel giant, known as Baosteel, noticed that the industry is gradually recovering from the low ebb seen in the fourth quarter of 2021, when production and consumption were sluggish.

Downstream demand from vehicles and shipbuilding sectors has been strong, and Chinese steel producers have also ramped up exports of hot-rolled coils to address the supply shortage in Europe fuelled by the Ukraine crisis, Baosteel said, adding that it's still a struggle for the sector to match performances from the year-ago period.