Southwest China’s Chongqing Iron and Steel (Chonggang) says it plans to sell several non-core assets and a cold rolled coil line to boost its flagging financial performance. The company is increasing production in the hope that its performance will improve, despite heavy losses in the first half of this year.

The sale of Chongqing Iron and Steel Group Transportation, Chongqing Iron and Steel Electronics and Jingjiang Chonggang East China Trading will help focus the company on its core business of selling mainly flats to the southwest. These three have combined assets of around Yuan 140 million ($22.8m), according to the company’s 2013 annual report.

One source at the company said he had only just heard the CRC line was to be sold. The line is one of Chonggang's oldest and the sale will include land-use rights, suggesting the buyer may not be interested in the mill itself, Kallanish understands. A report in the China Securities Journal suggests the line was uncompetitive but gives no further details.

Chonggang said in July that it intends to build a new CRC line in partnership with Korea’s Posco, part of a potential 3 million tonnes/year Finex project. However, that idea has been mooted previously and has yet to get off the ground.

Chonggang booked losses of Yuan 945 million in the first half of 2014 after revenues fell 35.18% to Yuan 6.03 billion. This followed from a 2013 loss of Yuan 2.5bn which led to the resignation of Chonggang’s chairman. The company is listed on the Shanghai stock exchange and continued losses could result in a delisting warning.

The company restarted its third 2,500 cubic metre blast furnace last week in the hope that it could benefit from an improved market. The furnace had been idled in late 2013. It hoped the July-September quarter would mark a turnaround in its performance. The cheap price of iron ore could help, Kallanish notes.