Baoshan Iron & Steel, the listed unit of China's biggest steel maker, reported net profit of 6.99 billion yuan (1.02 billion U.S. dollars) in 2008, down 47.9 percent year-on-year.

 

The steel maker, a Shanghai-listed subsidiary of Baosteel Group Corp, said in its annual report that the total profit plunged 55.1 percent last year to 8.67 billion yuan while revenues rose 4.9 percent to 200.85 billion yuan.

 

"China's steel firms will face challenges in the long run, including excessive production capacity, lacking of natural resources and high costs," the report said.

 

The company expected to post revenues of 145.7 billion yuan in 2009 and planned to produce 22.42 million tonnes of iron and 24.93million tonnes of steel in 2009.