Baosteel to keep April prices flat
By Richard Fu |
March 13, 2012, Tuesday
|
Print Edition
Print Edition
BAOSHAN Iron and Steel Co yesterday said it will maintain April prices for major products at March's level, reflecting the uncertain outlook the industry faces for steel demand going into the second quarter.
Meanwhile, Moody's said China's lower economic growth target is credit negative for Chinese steel mills, which have suffered from high input costs, obsolete capacity and output of low-end products.
Shanghai-based Baosteel, China's largest listed steel maker, said prices for April delivery will be unchanged. It raised March prices mildly in anticipation of a seasonal recovery in demand, after leaving them flat for January and February.
The firm's pricing policy is regarded as a benchmark in the domestic steel industry.
Moody's yesterday said the lower 2012 growth target of 7.5 percent in China's gross domestic product, announced by Premier Wen Jiabao last week, as well as the government's plan to move from investment-dependent growth to a consumption-driven one will be credit negative for the steel industry.
Moody's predicted China's steel demand to grow 5.7 percent this year, down sharply from the 11.1 percent average rise in the previous three years.
"The moderation in steel growth this year and next reflects the completion of most of the Chinese government's major infrastructure projects that were part of a 4 trillion yuan (US$632 billion) stimulus package following the 2008 global financial crisis," said Jonathan Lee, senior analyst at Moody's Investors Service. "If the government further slows the country's infrastructure construction or scales down its welfare housing projects, the demand for steel will weaken beyond what we have projected."
This will mean Chinese mills have to cut capital expenditure, lower capacity utilization rates and cut selling prices.
Meanwhile, Moody's said China's lower economic growth target is credit negative for Chinese steel mills, which have suffered from high input costs, obsolete capacity and output of low-end products.
Shanghai-based Baosteel, China's largest listed steel maker, said prices for April delivery will be unchanged. It raised March prices mildly in anticipation of a seasonal recovery in demand, after leaving them flat for January and February.
The firm's pricing policy is regarded as a benchmark in the domestic steel industry.
Moody's yesterday said the lower 2012 growth target of 7.5 percent in China's gross domestic product, announced by Premier Wen Jiabao last week, as well as the government's plan to move from investment-dependent growth to a consumption-driven one will be credit negative for the steel industry.
Moody's predicted China's steel demand to grow 5.7 percent this year, down sharply from the 11.1 percent average rise in the previous three years.
"The moderation in steel growth this year and next reflects the completion of most of the Chinese government's major infrastructure projects that were part of a 4 trillion yuan (US$632 billion) stimulus package following the 2008 global financial crisis," said Jonathan Lee, senior analyst at Moody's Investors Service. "If the government further slows the country's infrastructure construction or scales down its welfare housing projects, the demand for steel will weaken beyond what we have projected."
This will mean Chinese mills have to cut capital expenditure, lower capacity utilization rates and cut selling prices.
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