Bluescope Steel, Australia's largest steelmaker, has posted a 38% fall in first-half profit after export prices fell and raw material costs increased.
Bluescope is looking to create more processed steel products
It posted a net profit after tax of 312m Australian dollars ($231m; £132m) for the six months to 31 December, down from A$502m in 2004.
Bluescope, which is expanding in Asia and has operations in the US, was hit by higher iron ore and coal costs.
The firm has warned steel markets are being hit by excess Chinese production.
Bluescope is investing heavily in new plants that will supply further processed products, such as painted steel coated with zinc and aluminium for corrosion resistance.