BEIJING, Nov. 5, 2009 (Xinhua News Agency) -- The Baosteel Group, China's largest steel producer, is expected to make profit of about 10 billion yuan this year, compared with 23 billion yuan last year, said an official with the National Development and Reform Commission (NDRC) on Wednesday.

Xiong Bilin, deputy director general of the Industry Department of the NDRC, said during the Second International Energy-saving (OOTC:ILGL) and Environmental Protection Forum that he had the information directly from Xu Lejiang, chairman of Baosteel.

The poor profitability of large steel enterprises this year is rooted in low steel prices and faltering demand for steel plates.

Driven by the country's massive infrastructure construction, the sales of building-steel products such as rebar and wire rod were obviously better than that of steel plates in the first three quarters. However, large steel plants have an advantage in the production of steel plates.

Xiong believes the outlook for Baosteel is optimistic. He pointed out that building-steel products led the rally of the steel sector in the first nine months, thanks to the boost from infrastructure investments. However, most of the construction projects have already completed the groundwork, which means that their boost to building-steel sales has started to fade.

As infrastructure projects are progressing, the demand for steel plates will warm up, undoubtedly good news for large steel producers, Xiong added.