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March 17, 2010

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Wuhan Iron raises steel costs for April

WUHAN Iron and Steel raised April prices for major products by up to 7.7 percent as it expects higher term ore prices to result from talks between Chinese mills and overseas suppliers.

It raised prices for hot-rolled coil for April delivery by 300 yuan (US$44) a ton, or 7.7 percent, from March, while prices for cold-rolled products also rose 300 yuan, or 5.6 percent, China Securities Journal reported yesterday.

The firm's move came after Baoshan Iron and Steel raised April prices for some products by up to 300 yuan.

"The ore miners are sticking to their larger-than-expected term ore price hike in the annual iron ore price negotiations," said Wang Pan, an analyst of Xiangcai Securities Co.

"It's no surprise that steel mills raised the prices in advance to pass the increasing costs to its customers."

The iron ore negotiations are scheduled to be concluded on April 1.

Anglo-Australian miners Rio Tinto and BHP Billiton are sticking to a rise of 40 percent while Brazilian Vale reportedly wanted a jump of as much as 90 percent. The higher prices will be beyond Chinese mills' capability to break even as they expected a maximum 30 percent rise.


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