Anshan Iron and Steel Group Corp, one of China's leading steel firms, Thursday reported losses of 4.16 billion yuan ($669 million) for 2012, adding to the list of money-losing companies in a sector that is struggling under slowing economic growth and increasing steel production.
The Shenzhen-based company said it will warn on Friday it is in danger of delisting due to two consecutive years of losses, and its daily trading limit will drop to 5 percent, rather than 10 percent as in the past.
The company recorded a loss of 2.15 billion yuan in 2011.
It joins other steel firms in reporting huge losses for 2012.
Maanshan Iron & Steel Co reported a 3.95 billion yuan loss in 2012 and Anyang Iron & Steel Co recorded a 3.5 billion yuan loss. SGIS Songshan Co has also reported losses for two consecutive years, losing 1.9 billion yuan in 2012 and 1.1 billion yuan in 2011.
These steel firms all attributed their losses to a slow global economic recovery coupled with growing steel output.
China's economy began to pick up starting in the fourth quarter of 2012, with the construction of more infrastructure projects giving a boost to the steel industry but contributing little to the steelmakers' annual performance.
Rising steel output is likely to intensify domestic oversupply due to limited growth of market demand, and there will still be heavy downward pressure on steel prices in the future, the China Iron and Steel Association said in February.
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