Leading Chinese steelmaker Baoshan Iron & Steel Co. (Baosteel), a key subsidiary of the state-owned holding China Baowu Steel Group, reported a 15.3% y/y decline in net profit for January–September 2026, to 6.7 billion yuan ($1 billion). The figure fell despite a 5.7% increase in the company’s revenue, to 245.6 billion yuan ($36.88 billion).
The company attributes the deterioration in profitability to the fact that the recovery in finished steel prices lagged behind the growth in raw material costs. This led to a significant narrowing of the spread between selling and purchase prices.
In the first nine months of 2026, Baosteel produced 36.6 million tonnes of pig iron and 38.6 million tonnes of steel, while sales of commercial billets and finished rolled products reached 39.1 million tonnes. Export orders increased by 13.6%, to 5.87 million tonnes. Sales of high-tech, high-margin products in the “2+2+N” category grew by 1.1 million tonnes, bringing the total to 26.8 million tonnes.
The third quarter proved more challenging for the producer: with revenue up 4.8% (to 84.9 billion yuan / $12.75 billion), net profit fell by 29.7%, to 2.2 billion yuan ($325 million).
The main factor putting pressure on financial results in the third quarter was a 34.9% surge in coking coal prices in Shanxi province. At the same time, domestic steel prices decreased by 1.9% q/q, while the Platts iron ore index (62% Fe) fell by 7.9%.
As GMK Center reported earlier, Baosteel ordered two seamless pipe production lines from SMS Group. The design capacity of each line will be almost 1.2 million tonnes of seamless pipes per year. Production on the first line is scheduled to start in the fourth quarter of 2027.
