SINGAPORE: Baoshan Iron & Steel Co Ltd (Baosteel), China's biggest listed maker, reported its nine-month net profit more than doubled as an oversupply in the sector showed signs of improving due to capacity cuts.
Net profit at Baosteel, a bellwether of China's steel firms rose 148.3 percent to 5.6 billion yuan ($827.06 million) in January to September from a year earlier, it said on Monday.
"On the whole, the steel market regained some activity in the third quarter compared to the second quarter, though the sector has not emerged from its oversupply situation," Baosteel said in a filing to the Shanghai stock exchange.
Other Chinese producers also expect to fare better. Angang Steel Co Ltd and Maanshan Iron & Steel Co Ltd expect to return to profitability in the January-September period after racking up losses a year ago.
Earlier this month, Angang Steel said it expected to turn a nine-month net profit of 977 million yuan, while Maanshan Iron & Steel forecast a net profit of 757 million yuan during the same period.
China, the world's top steel producer, churning out half the global output, has been stepping up efforts to slash capacity as a glut boosted cheap exports and caused some producers elsewhere to shut.
Baosteel, together with another domestic steel giant Wuhan Steel Group, have completed their targeted capacity cuts for this year, state media agency Xinhua reported on Saturday, citing a state assets supervisor official.
Beijing is, however, aiming to shut around 100 million to 150 million tonnes of capacity in the next five years.
Last year marked the first drop in China's steel output since 1981 as producers responded to shrinking domestic demand in an economy that grew at its slowest pace in 25 years.
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