Baosteel 9-Month Net Profit Falls 15.3% on Cost Squeeze
Baosteel's net profit fell 15.3% year over year to RMB 6.74 billion ($1.01 billion) during January-September 2026 despite higher revenue, as raw-material costs rose faster than finished-steel prices and narrowed the producer's margins.
- 9-month net profit: RMB 6.74 billion, down 15.3% Y/Y.
- Revenue: RMB 245.65 billion, up 5.7% Y/Y.
- Q3 net profit: RMB 2.17 billion, down 29.7% Y/Y.
- Steel production: 38.63 million tonnes in January-September.
- Export orders: 5.87 million tonnes, up 13.6% Y/Y.
Baosteel's results show the profitability squeeze more clearly than the revenue figures alone. Revenue increased 5.7% during the first nine months, but the gross margin of its steelmaking segment fell to 4.8% from 6.2% a year earlier. The company attributed the pressure to finished-steel prices recovering more slowly than raw-material costs, narrowing the spread between selling and purchasing prices.
Leading Chinese steelmaker Baoshan Iron & Steel Co. (Baosteel), a key subsidiary of China Baowu Steel Group, reported attributable net profit of RMB 6.74 billion ($1.01 billion) for January-September 2026, down 15.3% year over year.
Revenue increased 5.7% to RMB 245.65 billion ($36.88 billion).
Baosteel attributed the weaker profitability to finished-steel prices recovering more slowly than raw-material prices, narrowing the spread between selling and purchasing costs.
Steel Output Reaches 38.6 Million Tonnes
During the first nine months of 2026, Baosteel produced 36.61 million tonnes of pig iron and 38.63 million tonnes of steel.
Sales of commercial billets and finished steel products totaled 39.15 million tonnes.
Export orders increased 13.6% year over year to 5.87 million tonnes.
Sales of Baosteel's high-tech and higher-margin “2+2+N” product portfolio increased by approximately 1.12 million tonnes to 26.81 million tonnes.
Third-Quarter Profit Falls 29.7%
The profitability pressure intensified during the third quarter.
Baosteel reported Q3 revenue of RMB 84.92 billion ($12.75 billion), up approximately 4.8% year over year, while attributable net profit fell 29.7% to RMB 2.17 billion ($325 million).
The company said Shanxi coking coal prices rose 34.9% quarter over quarter during the period. Domestic steel prices declined 1.9% Q/Q, while the Platts 62% Fe iron ore index fell 7.9%.
Baosteel Expands Seamless Pipe Capacity
Baosteel has also ordered two seamless pipe production lines from SMS Group for its Ma'anshan operations.
Each line will have design capacity of nearly 1.2 million tonnes of seamless pipe per year, with production on the first line scheduled to begin in the fourth quarter of 2027.
Courtesy: GMK Center. Financial and operating figures verified against Baosteel's 2026 third-quarter reporting.
