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Baosteel's move may signal turnaround
By Richard Fu |
December 13, 2011, Tuesday
|
Print Edition
Print Edition
BAOSHAN Iron and Steel Co, China's largest listed steel mill, left January prices for most products flat but raised those for some products modestly, according to pricing policy released yesterday.
Analysts said Baosteel's action indicated that the market may improve gradually from the beginning of next year although demand from the home appliance and auto industries is seen to remain weak.
Baosteel, whose price adjustments are seen as a benchmark for the Chinese industry, said it will keep hot-rolled coil prices unchanged but raise cold-rolled coil by 100 yuan (US$15.7) a ton and electro-galvanized steel prices by 100-200 yuan per ton from December's level.
"The willingness of downstream sectors to place huge orders is not strong, so obviously Baosteel doesn't have the basis to raise prices by a big margin," Custeel analyst Hu Yanping said, adding the steel industry still faces huge cost pressure although iron ore prices have fallen.
Baosteel has already cut prices for main products by 200-300 yuan per ton in December from November.
China's industrial output grew the least last month in over two years, the National Bureau of Statistics said last Friday, as the eurozone debt crisis hurts export demand.
Meanwhile, Baosteel said over the weekend it plans to sell some stainless and special steel assets to parent Baosteel Group Corp to optimize asset allocation, according to a filing to the Shanghai Stock Exchange.
The assets involved won't exceed 20 percent of the company's latest audited book value, it said.
China International Capital Corp analyst Luo Wei said the disposal will help Baosteel trim losses by 900 million yuan and allow it to focus on areas, for example the carbon steel business, where it is strong.
Baosteel fell 0.61 percent to 4.85 yuan yesterday after trading resumed following a 4-day suspension.
Analysts said Baosteel's action indicated that the market may improve gradually from the beginning of next year although demand from the home appliance and auto industries is seen to remain weak.
Baosteel, whose price adjustments are seen as a benchmark for the Chinese industry, said it will keep hot-rolled coil prices unchanged but raise cold-rolled coil by 100 yuan (US$15.7) a ton and electro-galvanized steel prices by 100-200 yuan per ton from December's level.
"The willingness of downstream sectors to place huge orders is not strong, so obviously Baosteel doesn't have the basis to raise prices by a big margin," Custeel analyst Hu Yanping said, adding the steel industry still faces huge cost pressure although iron ore prices have fallen.
Baosteel has already cut prices for main products by 200-300 yuan per ton in December from November.
China's industrial output grew the least last month in over two years, the National Bureau of Statistics said last Friday, as the eurozone debt crisis hurts export demand.
Meanwhile, Baosteel said over the weekend it plans to sell some stainless and special steel assets to parent Baosteel Group Corp to optimize asset allocation, according to a filing to the Shanghai Stock Exchange.
The assets involved won't exceed 20 percent of the company's latest audited book value, it said.
China International Capital Corp analyst Luo Wei said the disposal will help Baosteel trim losses by 900 million yuan and allow it to focus on areas, for example the carbon steel business, where it is strong.
Baosteel fell 0.61 percent to 4.85 yuan yesterday after trading resumed following a 4-day suspension.
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