China's Wuhan Iron & Steel has sent its 2010 annual report to the Shanghai Stock Exchange, in which, the company has said that they are expecting steel demands to weaken in 2011, in context to which they are further trimming profit margins for the country's steel sector.

The company said on Monday that "Prices of iron ore, coking coal, electricity and transportation are poised to rise, further pushing up the production cost, while steel demand from downstream sectors will gradually simmer down".

Also, it was marked that the China's steel sector will be compressed by an uncontrollable rise in raw material prices and this year, will be congested with very low profit margins as compared to the average of other sectors.

China's Wuhan Iron & Steel further posted the 12.5% growth in its net profit in 2010 from 2009, which the company acquired because of the rising steel prices, calculating to the net profit of 1.7 billion yuan ($261.8 million) that it made last year. Along with same, the iron ore supply shortage that will persist in the long run was also shown in the company’s report.

Deng Qilin, President of China's Wuhan Iron & Steel, said in March that “China would suffer a shortage of iron ore supply over the next 10 years as the country was still expanding its steel capacity”.