China’s third largest steel producer, Wuhan Iron and Steel, posted a 90 per cent rise in first-half net profit compared with a year earlier, Xinhua reported. The improvement was attributed to strong domestic demand and higher steel prices.

Wuhan Steel’s net profit was Rmb963.5m for the first half of 2010, as its steel production rose by nearly 30 per cent to 8.04m tonnes. However, its production costs also climbed by about 47 per cent due to higher raw material prices, the report said.

Meanwhile Chongqing Iron & Steel Group, the largest steel maker in west China, has signed an MOU with South Korean steelmaker Posco to set up a steel plant in China, sources reported.

Posco will employ a production process that reduces costs and pollution emissions. The move is expected to help Chongqing Iron improve its technology and accelerate the overall development of China’s steel industry.