Baoshan Steel Cuts Prices for a Second Month as Automobile Demand Weakens
Baoshan Iron & Steel Co., the biggest publicly traded Chinese steelmaker, cut prices for a second month amid weakening demand from makers of automobiles and appliances.
Prices of low-carbon hot-rolled and some cold-rolled products were slashed by 300 yuan ($44) a metric ton, the Shanghai-based mill said today on its trading website Bsteel.com. The steelmaker kept prices of other hot-rolled and cold-rolled grades unchanged.
Steel prices in China, the biggest consumer of the metal, are likely to drop 10 percent for the rest of the year because of high inventory and poor demand, JPMorgan Chase & Co. said in a note dated yesterday. China Steel Corp., Taiwan’s largest producer, today lowered prices for the first time since January.
“Global steel supply outstrips demand,” said Gisele Tseng, a Taipei-based analyst at Capital Securities Corp. “The outlook will depend on levels of inventories in China.”
Baoshan Steel fell 2.8 percent to close at 5.98 yuan in Shanghai, extending this year’s decline to 38 percent. The benchmark Shanghai Composite Index fell 1.6 percent today. China Steel dropped 0.3 percent to NT$30.35 in Taipei trading before its price cut announcement.
Baoshan Steel also cut prices of some zinc-galvanized sheets by 300 yuan a ton, lowered heavy plate prices by 500 yuan and reduced silicon steel prices by 300 yuan to 500 yuan, it said on the website.
Government Measures
The company last month lowered prices by 300 yuan to 1,000 yuan a ton for July delivery, the first cut in eight months, amid concerns government measures to curb credit growth and speculation in the property market will trim demand.
Steelmakers in the third quarter face price pressures on raw materials and from customers, Baosteel Group Corp., Baoshan’s parent, said last week.
China Steel, based in Kaohsiung, lowered prices by an average 4 percent for September, and will also retrospectively slash prices for earlier orders placed for July and August delivery, it said in a statement today.
Angang Steel Co. is also considering cutting August prices by 400 yuan a ton, UC361’s analyst Hu Yanping said today. Angang hasn’t made a final decision for the August prices, she said.
--Helen Yuan, with assistance from Yu-huay Sun. Editors: Tan Hwee Ann, Indranil Ghosh.
To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net
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