China's major listed steel companies forecasted a huge drop in net profit in 2008, mainly due to the plunging steel price, according to the latest annual net profit forecasts.

China's Angang Steel Company Ltd (Ansteel) reported an estimated 55 percent profit decline. Liuzhou Iron&Steel (Group) Company said annual net profit may drop 98 percent, and Sansteel Minguang Co Ltd forecasted a 70 to 100 percent slump.

The weak performance mainly resulted from the shrinking market demand and price decline of both steel and raw materials, said the reports.

According to Lgmi.com, a metals information research center in China, price for secondary metallurgical coke dropped 50 to 60 percent from its highest point in the first half of 2008, while steel price dipped about 40 percent.

Chinese Academy of Sciences said domestic steel price will stay at a low level this year in a report on China's economic outlook in 2009 last week.

China's steel market will face both "shrinking supply and demand" in 2009, said the report. However, market demand will revive as the economic stimulus package took effect, and steel companies will see the end of profit decline at the end of 2009.

(Xinhua News Agency February 1, 2009)