SHANGHAI, Jan 14 (Reuters) - Net profit at Baosteel Group, one of China's stop steel makers, dropped 32 percent last year to about 23 billion yuan ($3.4 billion), the Shanghai Securities News reported on Wednesday.

 

Steel demand from downstream industries such as shipbuilding shrank rapidly in the last few months of the year, forcing the group, which includes listed unit Baoshan Iron & Steel Co , to idle some furnaces in the final quarter, the newspaper quoted an unnamed, senior Baosteel official as saying.

 

Baosteel's output in the fourth quarter fell about 30 percent, the official was quoted as saying. The listed unit is due to release its 2008 earnings report in late March.

 

Other large steel groups also suffered from falling demand and tumbling steel prices in the fourth quarter, the newspaper noted.

 

Gross profit at Wuhan Iron & Steel Group, which includes Wuhan Iron & Steel Co, slid 18 percent to 7.6 billion yuan last year, the newspaper quoted an unnamed source in the group as saying.

 

The group cut as much as 28 percent of its production at one stage last year and some of its furnaces are still idled, the newspaper added.

 

Hebei Iron & Steel Group, which was formed last year, cut 25 percent of its production in the second half and still has 11 furnaces idled, the newspaper reported.

 

It said Shandong Iron & Steel Group's 2008 profit fell over 50 percent to about 3.5 billion yuan.

 

China's government will discuss concrete steps this week to support its auto and steel industries, which could include tax cuts and incentives to promote consolidation.