6 Jan 2010 12:30

Baosteel may lift February steel product prices by $73.23

Shanghai. January 6. INTERFAX-CHINA - Baoshan Iron and Steel Co. Ltd. (Baosteel), the Shanghai Stock Exchange-listed subsidiary of China's leading steelmaker Baosteel Group, may raise its ex-works prices for major steel products by between RMB 200 ($29.29) and RMB 500 ($73.23) per ton for February, an analyst told Interfax on Jan. 6.

"Prices of raw materials, including coke and iron ore, have risen rapidly recently, which are supporting domestic steel product prices. Therefore, I expect Baosteel will have a positive outlook towards prices in February and hike their ex-works prices accordingly," Bai Rui, general manager of Shanghai-based Mysteel Information's steel department, told Interfax.

The Shanxi, Hebei and Shandong coking industry associations have just hiked their January coke reference prices by around RMB 100 ($14.65) per ton. At present, the average reference CIF (cost, insurance and freight) price for Indian iron ore grading 63.5 percent is nearly $130 per ton, the highest it has been over the past 16 months.

"Baosteel's products have been selling well as they are mainly used in the automotive and home appliance industries, both of which have been boosted by government policies to support their development. In addition, China's automobile output and sales volume are continuing to rise," Bai added.

However, analyst Hu Yanping from Umetal told Interfax that Baosteel's price hike may not exceed RMB 300 ($43.94) per ton, as the company already significantly hiked its January prices.

Baosteel raised its January ex-works prices for major steel products by between RMB 150 ($21.97) and RMB 600 ($87.88) per ton.