Baoshan raises prices to trim its losses

BAOSHAN Iron & Steel Co has raised product prices for February delivery to trim losses, its first increase in five months, trade sources said yesterday.
Analysts said the rise is based on a stabilized market sentiment but may not be sustainable. Domestic steel prices stabilized last month after plunging more than 50 percent from June's peak as mills reduced output to sustain the market as demand dropped.

Prices for cold-rolled products were raised by 300 yuan (US$44) a ton, or more than 8 percent, while those for hot-rolled coil were raised by between 100 yuan and 200 yuan a ton, a gain of up to 6.2 percent, according to trade sources and industry consultancy Mysteel.

Prices for zinc-galvanized sheets were raised by 250 yuan a ton while those for color coated sheets went up by 450 yuan a ton, they said.

"Not only Baosteel, several other mills have been gradually raising prices by small margins," said Xu Xiangchun, director of Beijing Lange Steel Informaiton Research Center, an industry data provider.

The Shanghai Securities News reported on Tuesday that several mills including Angang Steel Co, Beijing Shougang Co and the private-sector Shagang Group had raised prices for January. Angang raised prices for cold-rolled products by 230 yuan a ton, it said.

But Xu said he didn't see price rise by major mills spreading into February and March as there were uncertainties over market trends.
"Mills raised prices as they are eager to trim losses, given their expensive inventories of both products and raw materials," Xu said. "Even after hikes, the products would still be sold below cost."

Baosteel, the domestic industry leader, has warned it may post a loss for the current quarter. It fell 2.22 percent to 4.85 yuan yesterday.