China Steel 2007 pre-tax profit rises 29% as product prices gain

China Steel Corp., Taiwan's largest mill, said full-year pre-tax profit rose 29 percent benefiting from rising demand and prices.
Profit was NT$61.7 billion last year, China Steel, based in Kaohsiung, southern Taiwan, said in a filing to the Taiwan Stock Exchange yesterday. The company also said steel prices are rising after some rivals cut production.

China Steel has raised prices for eight straight quarters on higher demand from shipbuilders and construction companies. The company, which has to report full-year profit by the end of April, in October posted a 43 percent gain in nine-month income.

The company yesterday also denied a report by Taipei-based Commercial Times that traders are stockpiling the alloy to drive up prices. The rising costs of raw materials have forced some rivals to cut production, and "robust demand" have boosted steel prices, the mill said.

Iron ore costs have tripled in five years due to surging demand from China, the world's largest steelmaker, and contract prices for the raw material may jump as much as 70 percent from April, Credit Suisse Group forecasted this month. South Korea's Posco and Japan's Nippon Steel Corp. have raised prices of their steel products to offset the higher costs.

China Steel, which produces about 10 million metric tons of the alloy a year, typically announces April-June prices for Taiwan customers late February.

China Steel was unchanged at NT$41.5 at the Taiwan Stock Exchange's 1:30 p.m. close yesterday, while the benchmark TAIEX index fell 2.3 percent.