(Yicai Global) Oct. 26 -- Profits at China’s steel producers are expected to drop due to steep increases in raw material and energy prices after earnings more than doubled in the first three quarters of the year, according to the vice president of the China Iron and Steel Association.

“Steel companies will see their profits drop amid pressure from much higher costs that will not decline in the short term,” Qu Xiuli said at the CISA’s third-quarter press conference yesterday, adding that “more steel firms have reduced or suspended production due to power shortage since last month.”

Imported ore fines cost USD171.67 a ton on average in the three quarters, up 73 percent from the same period last year. Coking coal, coke, and steel scrap prices jumped 57 percent, 57 percent, and 36.5 percent, respectively.

CISA members reported CNY5.3 trillion (USD830.5 billion) in operating revenues and CNY319.3 billion (USD50 billion) in profits in the January to September period, up 42.5 percent and 123 percent, respectively, from a year earlier, according to the association’s statistics.

Crude steel production plummeted 15 percent in the third quarter and it is expected to continue to fall this quarter in order to achieve the goal of making less steel this year compared with 2020, amid guidelines of dual control over the total energy consumption and energy intensity.

China turned out 671 million tons of cast iron in the first three quarters, down 1.3 percent from a year ago, per CISA data. Crude steel output rose 2 percent to 806 million tons, while that of steel gained 4.6 percent to 1 billion tons. Their growth rates fell 5.1 percentage points, 2.5 percentage points, and 1 percentage point, respectively, from the same period last year.

Editor: Futura Costaglione