Shares in China's Baoshan Iron and Steel Co jumped 2.4 percent Monday after the company said its first-half net profit was more than 12 times higher than the year before due to strong demand.
The listed unit of Shanghai Baosteel Group, the nation's second-largest steel maker in terms of output, rose 2.4 percent to 6.47 yuan, up from Friday's close of 6.32 yuan, outperforming a 1.6 percent overall market gain.
The company on Friday posted a first-half net profit of 8.05 billion yuan (1.2 billion dollars), compared with the 669.02 million yuan it earned in the first half of 2009.
It attributed the strong earnings growth to recovering demand and higher prices of steel products from the previous year, when demand was hit by the global financial crisis.
However, it said it expected full-year net profit to grow between 140 percent and 160 percent from the previous year, suggesting a significant drop in earnings in the second half of the year.
"The situation in the steel market doesn't allow for optimism. Steel prices in the domestic market fell dramatically in the third quarter while prices of imported iron ore remain at high levels," Baoshan said in the statement.
Steel demand from auto, home appliance and machinery industries is expected to slow down in the second half while removal of an export tax rebate on July 15 is adding to downward pressure on prices, it said.
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