Bloomberg reported that Wuhan Iron & Steel Co the listed unit of China third biggest steelmaker full year profit may drop more than 50% because of the global recession.

The company, based in the central Chinese city of Wuhan didn’t give a figure in a statement to Shanghai’s stock exchange. Wuhan Steel had net income of CNY 5.19 billion in 2008. Q3 profit fell by 76%YoY to CNY 546.6 million.

Wuhan Steel is the first Chinese steelmaker to forecast a decline for full year profit after domestic steel prices fell from a record set on June 5th 2008 as the recession slashed exports and domestic demand. Analysts including China Jianyin Investment Securities Co Mr Chu Xueliang expect Baoshan Iron & Steel Co to follow suit before profits revive next year thanks to the government CNY 4 trillion stimulus package.

Mr Chu said “Prices are under pressure due to overcapacity. We expect the market to recover next year.”

Wuhan gained 0.5% to CNY 7.99. The stock has risen 68% this year, compared with a 71% gain in the benchmark Shanghai Composite Index. The index gained 0.2% as of 9:45 AM.

(Sourced from Bloomberg)