Smaller steel firms begin to raise price
Updated: 2008-02-22 08:59
Many small and medium-sized steel manufacturers have raised their prices ahead of an expected price increase announcement by Baosteel, the nation's largest steelmaker.
 A Baosteel booth at a Shanghai exhibition. [China Daily] |
Jiangsu Shagang Group yesterday raised the factory price of screw steel by 240 yuan per ton. Shandong Laigang Group raised the price of several steel products by 100 yuan per ton, and Baotou Steel announced it was raising hot-roll and cold-roll steel price by 400 yuan per ton from March.
The price of cold-roll steel quoted by distributors jumped sharply yesterday, ranging from 100 to 270 yuan per ton, according to statistics from Mysteel.com, which tracks steel sales.
"Many distributors are hoarding steel products and waiting for the price to rise," said Gao Bo, an analyst at Mysteel website. In doing so, "they have created a temporary supply squeeze", he said.
An industry insider said Baosteel's price adjustment has already been settled in an internal meeting yesterday morning, and the new price will fully cover the rising cost from the expected 65 percent increase in iron ore price. But he declined to elaborate.
Analysts said the added cost from a 65 percent iron ore price jump ranged from 783 yuan to 824 yuan, and that the added cost for large steelmaker such as Baosteel is lower than that for other small and medium-sized manufactures.
Zhou Tao, an analyst at Sinolink Securities Co Ltd, said Baosteel can fully cover the rising raw material cost by raising price by 400 yuan per ton, or 10 percent, in the second quarter.
Baosteel has already raised steel price by around 10 percent in the first quarter this year. The company's hot-rolled steel coil, commonly considered a market benchmark, was priced at 4,042 yuan a ton in the first quarter.
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