The company, known as Baosteel, said in a filing to the Shanghai Stock Exchange that it earned 3.7 billion yuan ($559.5 million) during January-March, down from 5.4 billion yuan in same period of 2021.
The producer's first-quarter sales revenue rose 3.8% on an annual basis to 85.98 billion yuan, according to the filing.
"Affected by the Russia-Ukraine conflict... commodity prices jumped significantly," said the company, noting that Platts' 62% iron ore index jumped 29% in the first three months from the fourth quarter of last year.
Meanwhile, the resurgent COVID-19 outbreak had hurt overall performance in the industry, the company said.
Shanghai, where Baosteel's headquarters and one of its major production bases are located, started in March to battle the country's worst pandemic outbreak since the virus was first reported in 2020.
Authorities were forced to implement strict lockdowns which disrupted industrial production.
In a separate filing to the Shanghai bourse, the steelmaker said its net income in 2021 surged 86.1% to 23.63 billion yuan, in line with its forecast of an 86-89% increase flagged in January.
The record-high annual profits were underpinned by robust downstream demand last year and decent steel prices, the company said.
Its 2021 revenue stood at 364.35 billion yuan, up 29.4% year-on-year, the filing showed.
The company expects steel consumption to improve continuously this year on increasing infrastructure and manufacturing investment, while geopolitical conflicts could also fuel export demand.
Baosteel aims to produce 46.87 million tonnes of iron and 51.48 million tonnes of steel in 2022. It churned out 10.7 million tonnes of iron and 11.9 million tonnes of steel in the first quarter.
($1 = 6.6127 Chinese yuan renminbi)
(Reporting by Min Zhang in Beijing and Twinnie Siu in Hong Kong; Editing by David Goodman and Jan Harvey)
By Min Zhang and Twinnie Siu
