BEIJING (April 30): Baoshan Iron & Steel Co, China's biggest listed steelmaker, said on Thursday it would reevaluate its investment in a steel joint venture in Saudi Arabia as the Iran war and its wider impact in the Middle Easthave added more uncertainties.

Baosteel signed agreements in 2024 with Saudi Aramco and the Saudi Public Investment Fund (PIF) to build a steel plate manufacturing joint venture in Saudi Arabia. Baosteel holds 50% in the joint venture, while Saudi Aramco and PIF will take a 25% stake each.

"We have become more cautious about the investment given the current situation...we have recalled 13 employees dispatched to Saudi Arabia earlier," said Baosteel Chairman Zou Jixin at an earnings briefing.

The conflict began in late February with US-Israeli strikes on Iran, but has impacted neighbouring countries. It has pushed up logistics costs and led to accumulated inventory as unloading cargoes has become difficult at some ports, but the overall impact on Baosteel is manageable, according to Zou.

Despite growing geopolitical uncertainties, Baosteel aims to export 10 million metric tons of steel products in 2026, seeing growing overseas demand. The target includes 6.83 million tons from Baosteel's four production bases and 2.17 million tons from its two subsidiaries, said Shao Linfeng, a Baosteel executive.

China's crude steel output is forecast at 940 million tons in 2026, according to Zou, down from an already seven-year low at 960.81 million tons last year.

The manufacturing sector's share of steel consumption will rise to 58% in 2026 from 2025's 51%, said Zou.

Baosteel does not have plans for further consolidations in the short term, said another executive at Baosteel which currently holds 80 million tons of steel production capacity.

Baosteel reported on Wednesday an 8.6% annual fall in its first-quarter net profit, hit by higher costs for feedstock related to the Iran war and sluggish home demand. 

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