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Baosteel lowers prices of products

BAOSHAN Iron and Steel Co has lowered prices for major steel products for next month's delivery by up to 5.3 percent from this month's level to mirror the weak market conditions, an analyst said.

Prices for major hot-rolled steel products were cut by 200 yuan (US$29) a ton to 3,542 yuan a ton, and those for cold-rolled products were reduced by the same amount to 4,026 yuan a ton, according to traders and industry Websites.

"The pricing policy is in line with market conditions home and abroad and mirrors Baosteel's cautious outlook of the market," said Hu Yanping, an analyst at Umetal Research Center.

As market prices recovered in January, Baosteel had raised prices for last month and this month, after five straight months of price declines hit by the economic downturn. The market, however, tumbled again last month amid sluggish demand and high-level stockpiles.

Luo Bingsheng, vice chairman of the China Iron and Steel Association, last month said the market may not be reviving and extra state spending is needed to help boost demand.

Shanghai-based Baosteel should have sent out next month's prices about February 20, but it held off the release amid price plunges, sources said.

"As market prices are weak at present, mills tend to announce prices as late as possible to watch the market longer," said a sales agent at Baosteel. "No one wants to lay his cards on the table too early for fear of losing market share."

The pricing policy of Baosteel, the listed unit of China's top mill, is viewed as a benchmark in the domestic market, and the suspension had weighed on market worries about future price trend.

Baosteel would likely have suffered a sharp decline in orders if it kept next month's prices unchanged from this month's levels, Umetal's Hu said.


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