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Baosteel marks up prices of key products again
By Richard Fu |
January 22, 2013, Tuesday
|
Online Edition
Online Edition
BAOSHAN Iron & Steel Co raised prices of its main products for the second time in a month in a rare move which analysts said reflects the company's confidence in the market and its desire to pass on higher costs.
The booking prices for March delivery will rise 200 yuan (US$32) a ton for most hot-rolled and cold-rolled products, according to a statement today. The Shanghai-based mill hiked February prices by as much as 160 yuan a ton on January 7.
As China's biggest listed steel maker, Baosteel's monthly pricing policy usually sets the tone for other players in the domestic market.
The company was supposed to announce March pricing around February 10, but it did it in advance probably to arrange contracts before the Chinese New Year holidays in mid-February, said Custeel analyst Hu Yanping.
"Baosteel has received rising orders for February," she said, adding Baosteel has good expectations for demands in March and April, the traditional peak season amid warmer weather.
Higher iron ore prices also prompted Baosteel to raise prices so it could lock in profits in advance, Hu said.
China's steel sector was hit hard by dwindling demand, oversupply and higher costs last year. The market started to improve in the fourth quarter as the government accelerated approvals for infrastructure projects.
UBS analyst Hubert Tang said steel prices are likely to rise before falling in 2013. Demand from the construction sector would help but demand from manufacturing could be recovering very slowly, he said.
The booking prices for March delivery will rise 200 yuan (US$32) a ton for most hot-rolled and cold-rolled products, according to a statement today. The Shanghai-based mill hiked February prices by as much as 160 yuan a ton on January 7.
As China's biggest listed steel maker, Baosteel's monthly pricing policy usually sets the tone for other players in the domestic market.
The company was supposed to announce March pricing around February 10, but it did it in advance probably to arrange contracts before the Chinese New Year holidays in mid-February, said Custeel analyst Hu Yanping.
"Baosteel has received rising orders for February," she said, adding Baosteel has good expectations for demands in March and April, the traditional peak season amid warmer weather.
Higher iron ore prices also prompted Baosteel to raise prices so it could lock in profits in advance, Hu said.
China's steel sector was hit hard by dwindling demand, oversupply and higher costs last year. The market started to improve in the fourth quarter as the government accelerated approvals for infrastructure projects.
UBS analyst Hubert Tang said steel prices are likely to rise before falling in 2013. Demand from the construction sector would help but demand from manufacturing could be recovering very slowly, he said.
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