China's Baoshan Iron and Steel Co said its annual net profit for 2011 fell by around 43 percent, as the nation's industry is hit by a slowdown in the domestic and global economy.

Unaudited net profits fell to 7.3 billion yuan ($1.2 billion) in 2011 from 12.89 billion yuan in 2010, Baoshan -- the listed unit of China's second largest steel maker Baosteel Group -- said in a statement issued at the weekend.

The firm gave no reason for the fall in profit but it has previously said weaker demand and surging raw material costs eroded earnings in the first half of last year.

Analysts said falling prices and weaker demand for steel were caused by China's tight credit and slowing economy, which hit industries such as auto manufacturing and construction -- key markets for steel makers.

"The market has already priced in the decline in Baosteel's net profits in 2011 as steel prices are closely watched," Zhang Qi, an analyst at Haitong Securities, told AFP.

Shanghai-listed Baoshan's stock price was down slightly in morning trade on Monday, slipping 0.2 percent to 4.99 yuan.

The company's total revenue still rose 10.2 percent to 223.12 billion yuan in 2011, the statement said.

China tightened credit last year by hiking interest rates and restricting bank lending to control surging inflation, which peaked at 6.5 percent in July -- the highest in more than three years -- but has since retreated.

In December Beijing changed course and loosened credit by cutting the amount of money banks must hold in reserve for the first time in three years as it tries to boost economic growth and counter global turmoil.