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Higher Costs Slow Profits Growth of Major Steel Makers
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Profits growth of China's major steel companies have slowed a little as the coal and iron ore prices crept upward, according to the China Iron and Steel Association (CISA).

Net profits of the nation's 77 large and medium-sized steel firms soared by 91 percent year on year to 91.5 billion yuan (US$12.2 billion) in the first seven months, said Zhang Changfu, deputy head of the CISA.

Their profits hit 78.3 billion yuan in the first half, 108.8 percent up from the same period a year ago.

Combined sales of the 77 producers rose 35.3 percent to 1.1 trillion yuan from January to July, he said at at a forum held in Baotou, northern China's Inner Mongolia Autonomous Region.

Six of the producers reported losses of 132 million yuan, down 61.2 percent from the same period last year.

Zhang noted the steel sector was facing higher costs as prices of coal and iron ore continued to rise. Production costs jumped 8.34 percent in the first six months.

The cost, insurance and freight price of iron ore averaged US$74.64 per ton during the first half, US$13.23 higher than the same period last year, he said.

The iron ore price hikes alone added additional costs of 18.89 billion yuan to the steel sector as China imported 187.9 million tons of iron ore in the first six months, said Zhang.

(Xinhua News Agency September 14, 2007)

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