Baosteel rolls over prices into May, but removes discount
Last Update: 19/04/2012 11:59:20
Eastern China’s Baosteel has rolled over most of its list prices from April to May, with only slight cuts of RMB 200/tonne ($32/t) to its zinc-aluminum coated products and silicon steel prices, according to its price announcement on 12 April. However, some traders tell Platts Steel Business Briefing that Baosteel has actually removed a RMB 200/t discount on hot rolled coil and plate which was given to long-term customers for April deliveries. Market sources believe Baosteel’s approach to May’s market remains cautious, but the removed discount implies a slightly improved outlook. They believe it could be a sign of slight price rises in domestic flat steels next month. Flat steel prices should generally trend upwards slowly in quarter two (April-June), a Shanghai-based analyst agrees. He points out that daily rebar output jumped 11% month-on-month in February, suggesting a notable recovery in demand from the construction sector. This could then boost demand from related manufacturing sectors, such as machinery. However, the demand recovery will be slow, so flat steel prices are unlikely to pick up strongly, he adds. Currently, market inventories of HRC in China’s 26 largest cities remain on a downward trend. Traders therefore do not expect HRC prices to fall suddenly even if they are not increasing. According to the China Iron & Steel Association, combined HRC inventories dipped 88,000 tonnes week-on-week to 4.33mt on 6 April. Baosteel has kept its list prices stable for HRC, plate, CRC, hot-dip galvanized coil, electro-galvanized coil, colour-coated products and pickled HRC.
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