25 Apr '11, 4am

Wuhan Steel expects steel demand to weaken in 2011

SHANGHAI, April 25 (Reuters) - China's Wuhan Iron & Steel expects steel demand to weaken in 2011, further trimming profit margins for the country's steel sector, the company said in its 2010 annual report to the Shanghai Stock Exchange. "Prices of iron ore, coking coal, electricity and transportation are poised to rise, further pushing up the production cost, while steel demand from downstream sectors will gradually simmer down," the company said on Monday. China's steel sector will be squeezed by a disorderly rise in raw material prices as well as overcapacity this year with its profit margins far lower than the average of other sectors. The company posted 12.5-percent growth in its net profit in 2010 from 2009, thanks to rising steel prices. It made a net profit of 1.7 billion yuan ($261.8 million) last year. Wuhan Steel also added that the iron ore supply shortage will ...

Full article: http://sg.news.yahoo.com/wuhan-steel-expects-steel-demand...

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