Wuhan Iron & Steel, China’s fifth-largest steel maker, reported a net profit of Rmb263m for the three months to 31 March, just one-eighth of the total made in the same period last year. The company managed to stay profitable despite the recent fall in steel prices thanks to relatively strong demand for its core value-added product, silicon steel.

On the downside, as an inland steel smelter it faces higher logistics cost than coastal competitors such as Baosteel and Ansteel, said Luo Wei, analyst at China International Capital Corporation.