MAANSHAN, April 5 (shanghaidaily.com) -- Maanshan Iron and Steel Co said net profit tumbled 94 percent last year in a dismal earnings report that reflected the difficulties in the Chinese steel industry.
The company, based in Anhui Province in east China, blamed slowing demand and higher raw material costs, as well as the write-off of inventory values.
Net income fell to 69.6 million yuan (US$11 million) last year from 1.1 billion yuan in 2010, Maanshan Steel said in a filing to the Hong Kong stock exchange today. That missed a 337.5 million yuan mean estimate of six analysts polled by Bloomberg News.
China's steel industry has been hit by slowing demand especially from the construction sector as a result of government curbs.
The China Iron and Steel Association has said the sales margin of its member steel companies averaged only 2.42 percent last year.
Industry executives and analysts have expected another difficult year for 2012 after Premier Wen Jiabao lowered China's economic growth target this year to 7.5 percent from 8 percent.