9 Dec 2009 09:21

Baosteel considers hiking January ex-works prices

Shanghai. December 9. INTERFAX-CHINA - Baoshan Iron and Steel Co. Ltd. (Baosteel), the Shanghai Stock Exchange-listed subsidiary of China's leading steelmaker Baosteel Group, may hike its steel product ex-works price by between RMB 300 ($43.94) and RMB 500 ($73.23) per ton for January, an analyst told Interfax on Dec. 9.

"Current domestic spot steel product prices are higher than they were a month ago, when Baosteel hiked its December ex-works prices by between RMB 100 ($14.65) and RMB 300 ($43.94) per ton. For example, current spot cold-rolled steel product prices are around RMB 200 ($29.29) to RMB 270 ($39.54) higher than they were in early November," analyst Hu Yanping from Umetal told Interfax.

Meanwhile, Hu said Baosteel's steel products, especially cold-rolled steel products, are selling very well on the domestic market at present, as China's automobile and home appliance output remains high. A large proportion of Baosteel's steel products are used in the manufacture of automobiles and home appliances. In November, China produced 1.39 million automobiles and sold 1.34 million automobiles, up 104.2 percent and 96.43 percent year-on-year respectively.

Furthermore, current strong prices of raw materials, including coke and iron ore, on the domestic market are also encouraging Chinese steel mills to hike prices in January, Hu added.

Both the Shanxi Coking Industry Association and Shandong Coking Industry Association recently hiked their December coke reference prices by RMB 50 ($7.32) per ton.

In early November, another major Chinese steel mill, Wuhan Iron and Steel (Group) Corp., also hiked its major steel product ex-works prices by around RMB 300 ($43.94) per ton for December.