OREANDA-NEWS. China's state-controlled Angang Steel has issued a profit warning for the half year ended 30 June, citing a slump in steel prices.

It said its profit for the six-month period is likely to fall by 73pc to 155mn yuan (\\$24.96mn) compared with Yn577mn for the same period a year earlier.

Since the start of 2015 the steel market has been "rapidly deteriorating", which has caused a severe fall in prices and profit margins, Angang said. While it had adopted cost-cutting measures, including a partial sale of shares in non-ferrous metals company Zhouzhou Group, the fall in prices were too sharp to be offset, Angang said.

Angang's parent company is yet to dispose off any shares in the steelmaker in the past six months, the company said, vowing that the parent will not do so in the next six months either to maintain shareholder confidence in the company.

Steelmakers, especially those with a large exposure to China's construction sector, continue to see an erosion in profit margins as steel demand has entered into the weak demand season in the rainy July-August months.