OREANDA-NEWS. May 12, 2011. In the first quarter, Baosteel Co.,Ltd. produced 5,797,000 tons of iron, 6,604,000 tons of steel, sold 6.277 million tons of steel products slab and billets and realized 4.17 billion yuan of combined profit, which was 1.1 billion yuan less than that of the same period last year and 9.1 billion yuan more compared with the previous statistic quarter and with 0.18 yuan earning per share, maintaining the excellent operating performance within the industry, reported the press-centre of Baosteel.

In the first quarter world economic recovered in a sustainable way. China's economy remained stable, but inflation pressure was not reduced, the domestic crude steel production continued its growth since last November. From mid-March on, daily output of crude steel hit record high, steel imports and exports went up substantially compared with the fourth quarter last year. During the same period, global primary commodity prices continued to rise, ore price was high, coal, coke and other raw material and fuel prices were rising, which promoted the rise in cost. Influenced by the national tightening policy and the slow start of downstream demand, the domestic steel market hit record high and then fluctuated.

Despite the grim business situation, Baosteel still assumed the attitude of "responsibility to  investors" and actively created values. To expand comprehensive competitive advantage in product development, quality and customer service, Baosteel Co.,Ltd. increased in research investment. In the first quarter, Baosteel Co.,Ltd. administrative expenses increased 34.7% over last year, mainly for research expenses. Compared with the end of last year, Baosteel Co.,Ltd. money fund increased 4.42 billion yuan, which was an increase of 48.1%. This was because Baosteel seized chance of interiml deposit and loan interest spread and the rise of value of RMB against U.S. Dollar. By maintaining and moderately increasing low-cost dollar financing and  carrying out  risk free operations like RMB structured deposit, Baosteel obtained value-added benefits. Trading financial assets were increased by 160 million yuan, an increase of 55.4%. Dividends receivable was increased by 250 million yuan , an increase of 1277.8%.

It is announced that the second quarter is the traditional steel consumption season, but the Japanese earthquake causes some uncertainty in the market outlook. Due to the further marked adjustment of national macro-control, increase of resource allocation and the slowdown in increase of downstream auto and other major industries, the steel industry business situation is still grim.