News Room - Steel Industry

Posted on 28 Feb 2008

Baosteel's Q2 steel price hike above expectation

Oriental Morning Post reported that Baosteel steel price policy for the second quarter for billet & slab, wire rod, HRC, HRC raise by as much as 10% on average is far above the market's expectations.

Mr Yang Baofeng and analyst with Orient Securities said weighted average price of Baosteel's common steel products rises CNY 739 per tonne based on sales volume and price hike for each variety. He said it is the biggest hike ever. Mr Yang said the new prices are relative to the Q1 levels, which are below the spot market, indicating a compensation factor in the pricing move, while primary reason for the hike is substantially escalating costs.

The report said the unexpectedly high price hike is believed a manifestation of Baosteel's sound outlook over the spot steel price in the second quarter.

According to Baosteel notice, its billet &slab and wire rod gain CNY 600 per tonne, HRC gains CNY 500 per tonne to CNY 800 per tonne and common CRC CNY 800 per tonne in the new policy, while HDG is the variety posting highest price gain of CNY 1000 per tonne.

Shortly after the 65% benchmark ore price hike was settled, over 100 steel plants in China pushed up their ex works prices by 5% to 10% to offset the additional costs.