Baosteel not to change prices
By Xiao Yu (China Daily)Updated: 2007-05-23 08:46
Baoshan Iron & Steel Co, China's biggest steelmaker,
will keep most prices unchanged for the third quarter.
The company, based in Shanghai, will keep the price of hot-rolled products, used in buildings, unchanged at 3,942 yuan a ton, excluding tax, it said yesterday. Cold-rolled product prices will also remain unchanged.
China, the world's biggest steelmaker, is imposing an export tariff of as much as 10 percent on some steel products from June 1, the Ministry of Finance said on Monday.
"The move shows Baoshan is not optimistic about the steel market," said Ma Haitian, an analyst at Beijing Antaike Information Development Co. "Chinese steel exports may slow, adding to local supplies, and dampening prices."
Baoshan shares, which gained 50 percent from the end of last year to Monday's close, fell as much as 3.8 percent to 12.51 yuan yesterday.
China is imposing an export tariff of 10 percent on steel wires and rods, plates and some other products, the Ministry of Finance said in its statement, which was issued after the nation's stock markets closed.
The country will also increase export duties on steel slabs, ingots and pig iron to 15 percent from 10 percent, according to the statement.
Soaring demand and China's closure of obsolete steel plants have led to steel price gains this year, benefiting Baoshan Steel, Angang Steel Co and other Chinese steelmakers.
Baoshan raised prices for this quarter, boosting cold-rolled products by 6.5 percent and hot-rolled products by 5.3 percent. The price increases in the April-June period were the first in three quarters.
China's economy expanded 11.1 percent in the first quarter this year, fueling demand for the metal that's used in buildings, automobiles, appliances and ships.
The price of hot-rolled sheet in Shanghai, a benchmark, gained 11.8 percent to 4,350 yuan a ton as of Friday, from December 2006.
"Steel price gains so far this year are faster than we had expected," said Antaike's Ma. "This may not be sustained in the third quarter."
China's crude steel output may rise as much as 13 percent to 475 million tons this year, compared with an estimated 14 percent increase in demand, the China Iron and Steel Association said in February. Output grew 25 percent in 2005, the fastest pace in at least nine years, and 18 percent last year.
Baoshan said it will raise prices of steel slabs and steel plates, used in ships, by 200 yuan to 500 yuan a ton. It will cut prices of zinc-galvanized steel, which is used in autos, by 300 yuan.
(For more biz stories, please visit Industry Updates)
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