It is reported that Xining Special Steel Co Ltd has achieved the operating income of CNY 5.7 billion in the first three quarters with net profit of CNY 0.288 billion up by 45% YoY and 39% YoY respectively. ESP posts at CNY 0.39.

Compared with the 100% profit growth in H1 the growth has been slowed down by 50% in the first three quarters impacted by the weak performance in 3Q. The company realized CNY 35.83 million of net profit during July to September with ESP posting at CNY 0.05 down by 56% YoY and 76% MoM. The profit squeeze is due mainly to the falling steel and raw materials prices.

Domestic steel prices have fallen unabated since June, putting a heavy strain on the mill's profit margin. Meanwhile, iron ore price, a greasy business of the mill, also posts continuous falling. Currently, sales price for Xining Special Steel's iron ore concentrate has fallen to CNY 600 per tonne to CNY 700 per tonne down from the peak level of CNY 1,400 per tonne. The increasing marketing costs and minority interests also cut into the mill's profit margin in the period.