Wuhan Steel Profits Soar

China's third largest steel mill, Wuhan Iron and Steel Company, posted a 90.43 percent rise in first-half net profit over a year earlier due to strong domestic demand and higher steel prices, according to Chinese news sources.

Wuhan Steel's net profit was 963.53 million yuan (US$142 million) for the first half of 2010, as its steel production rose by nearly 30 percent in the period to 8.04 million metric tons, sources reported.

The company's first-half-year sales reached 34.36 billion yuan, up 50.72 percent from one year earlier.

Production cost also climbed by about 47 percent due to rising prices of raw materials.

Company officials expect a "difficult time" in the second half of 2010, and caution that meeting its full-year profit target would be a "challenging task." Wuhan is concerned that high prices of iron ore, coal and electricity will further push up production costs and squeeze profit margins, according to the report.