China's listed steel companies expect better financial results for 2016

SINGAPORE (Reuters) - Several listed Chinese steel companies expect to either return to profit or log a strong rise in net profit for 2016 due to improving product prices as the government attempts to cut excess capacity, and cost control efforts.

Shanxi Taigang Stainless Steel Co Ltd expects to swing back to black in 2016 with a net profit of between 1.05 billion yuan ($152.78 million) and 1.25 billion yuan, it said in a filing to the Shenzhen stock exchange on Friday.

In 2015, Taigang Stainless Steel logged a net loss of 3.71 billion yuan as the sector suffered from overcapacity.

"Our company strengthened operations by improving our product quality and cutting costs. The sector is also turning around, which helped the company return to profitability in 2016," it said in the statement.

Earlier in the week, Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd and Hang Zhou Iron & Steel Co Ltd said they were set to emerge from losses to log a profit for 2016.

On Tuesday, Baoshan Iron & Steel Co Ltd (Baosteel), the country's largest listed steel maker, said it was forecasting a net profit rise of about 770 percent from 1.0 billion yuan a year ago, sparking a strong rise in its stock a day after.

Baosteel attributed its profit forecast to cost cuts and also comes as it merges with smaller rival Wuhan Iron and Steel Co Ltd to form Baowu Steel Group.

Apart from curbing excess capacity, China's government also increased spending to help boost its economic activity last year also spurred demand for steel in the world's top consumer and producer.

($1 = 6.8725 Chinese yuan renminbi)

(Reporting by Lee Chyen Yee in Singapore, editing by David Evans)