BAOSHAN Iron & Steel Co said it may post a loss in the current quarter while profit in 2009 would be less than this year, amid falling steel prices and weaker demand.

The comments, made by chief financial officer Chen Ying yesterday, came after China's top mill on late Wednesday reported a forecast-missing third-quarter net profit of 2.85 billion yuan (US$417 million), which nearly halved from the previous quarter.

The global economic slowdown has reduced steel orders from property builders and car and home appliance makers, forcing mills to cut output and prices in China, the world's top maker and exporter. The whole domestic industry is expected to suffer a loss in October and many small mills in northern Hebei Province have closed, according to China Iron and Steel Association.

"The company may incur losses in the fourth quarter," Chen said during an online briefing with investors. "And it will be difficult for earnings next year to match this year's."

The Shanghai-based company would schedule its output for the remainder of the year to be more closely aligned with sales, Chen said. It also expected to write off more inventories to improve cash flow.

Baosteel has inventories worth 52.1 billion yuan, including 17.7 billion yuan of raw materials, 13.8 billion yuan of semi-finished products and 16.3 billion yuan of finished products, Chen said.

Some analysts have lowered their forecast for Baosteel's earnings per share after the results announcement.