Ansteel’s director Fu Jihui says the company initially plans to produce over 18 million tons of steel and 17 million tons of steel products in 2008. It purchased iron ore at 790 yuan per ton in the first quarter and coking coal at 880 yuan per ton with a further rise of 100-200 yuan per ton for the latter in the second quarter.
He notes the 22.6 billion yuan Bayuquan project will start operations in the later half of 2008 with an annual capacity of 5 million tons. Ansteel sold its products at 4,689 yuan per ton in the first quarter, up 11% and was expected to grow 10% in the second quarter.
It purchases 75% of iron ore necessary from its parent company and remaining 25% from overseas, most of them are bought under long-term contracts. The company will reduce exports from 2008 as gross profit margin from exports could be 3 percentage points lower than that from domestic sales, he says.
