Baosteel Group Corp, China's biggest steelmaker, has already exceeded last year's full-year profit in the first nine months, driven by demand from automakers, shipbuilders and construction companies.

The Shanghai-based company had profit of 29 billion yuan in the nine months ended September 30, Chairman Xu Lejiang said yesterday at the 17th National Congress of the Communist Party of China in Beijing. That compares with 2006 full-year earnings of 22.3 billion yuan.

Related readings:  Baosteel nods to Hebei venture  Baosteel seeks more acquisitions  Baosteel's profit jumps 80% in first half  Baosteel signs mine deal

Baosteel's production may gain 24 percent this year driven by demand in China, the world's biggest steel consumer, Xu said. Steel prices gained 12 percent in the nine months as capacity growth slowed after the government tightened loans to mills.

"Higher prices and increased output helped boost its earnings," said Fu Hao, who helps manage about $500 million including Baoshan stock, at E-Fund Asset Management Co in Guangzhou.

Sales at the State-owned steelmaker may exceed 200 billion yuan this year on production of 28 million tons, Xu said. Last year, the company had sales of 181 billion yuan, with output of 22.5 million tons.

Baosteel, which has a capacity of 30 million tons, will grow in China and overseas through acquisitions, the Shanghai-based company said. It plans to more than double capacity to 80 million tons, boosting sales to $50 billion and profit to $5 billion by 2012, putting it in the top 200 of the Fortune Global 500 companies.