(Yicai Global) Nov. 2 -- Baoshan Iron and Steel’s stock price fell for a second straight day after the Chinese metals giant reported slower profit growth in the third quarter compared with the previous three months and said it expects greater pressure amid rising costs and weaker demand.

Shares of the company better known as Baosteel [SHA: 600019] ended 3.6 percent lower today at CNY6.76 (USD1.06) apiece, after retreating 1.8 percent yesterday. The wider Shanghai market lost 1.1 percent today.

Net profit jumped almost 69 percent from a year earlier to CNY6.5 billion (USD1 billion) in the three months ended Sept. 30, according to the state-owned steel producer’s earnings report published on Oct. 30. That was lower than the second quarter’s CNY9.7 billion, which had almost quadrupled from a year ago.

The Shanghai-based firm is still unsure about demand next year but is cautiously optimistic about the first quarter, an official said, according to the minutes of a meeting with investors published on its social media account. The official called on investors to take a rational view of the steel industry’s earnings, saying that it is unreasonable to expect continued new highs based on second-quarter results.

Baosteel said that due to the impact of policies to control the real estate market, steel demand is weak, dragging down steel prices. Iron ore costs have fallen, but those of coal, alloys, and energy media have risen significantly. Fixed costs also accrue at the end of the year, so quarter-on-quarter performance pressures are greater in the fourth quarter, it said.

But as the supply of automotive chips recovers, demand for steel plates used in cars is expected to pick up, while demand from home appliance makers is also expected to improve, positively impacting Baosteel’s financial results, the firm added.

Editor: Peter Thomas