Chinese steel mills' profit in July is expected to exceed 20 billion yuan (US$2.93 billion), as the monthly growth of steel prices rose to an eight-year high, analysts said Monday.

Steel prices jumped in July, prompting profit in steel enterprises to expand, according to Xu Xiangchun, chief analyst with industry information provider MySteel.com.

The benchmark index of MySteel.com. for domestic steel prices rose 11.9 percent in the month.

Net profits in hot-rolled coil and cold-rolled coil are estimated to stand at 600 yuan and 1,400 yuan per tonne, as their prices gained by 376 yuan and 473 yuan per tonne in July, respectively, said Xu.

Full-year profit of China's steel makers will reach 100 billion yuan if steel price remains stable in the second half, said Xu.

A revival in demand and the government's continuous economic stimulus will help stabilize the steel prices, said Qi Xiangdong, vice secretary-general of the China Iron and Steel Association (CISA).

Profit in China's 71 major steel enterprises totalled 3.55 billion yuan in June, expanding from May when they turned profitable after seven-month losses.

The aggregate net profit of China's major steel producers fell 43 percent to 84.6 billion yuan last year on weak demand amid the global financial crises, according to the CISA.

(Xinhua News Agency August 3, 2009)