Baoshan Iron & Steel Co., China’s biggest publicly traded steelmaker, cut prices for the first time in eight months amid concerns the government’s credit curbs may trim demand from automakers and builders.
Hot-rolled coil prices for July delivery were reduced by 300 yuan ($44) to 500 yuan a metric ton, and automotive cold-rolled prices by 500 yuan to 1,000 yuan a ton, the Shanghai- based mill said today on its trade website. That would be the first price cut since November.
Baosteel Group Corp., the steelmaker’s parent, said last month mills may face a “difficult” second half as concern increases that measures to curb speculation in the property market will trim demand. Falling prices and high raw-material costs may force some producers to shut plants for maintenance, UC361.com analyst Hu Yanping said June 2.
“Speculative froth is being driven out of the commodities market based on fear of tightening,” Michelle Applebaum Research Inc. said today in an e-mailed note. Baoshan Steel “is generally considered a lagging indicator in Chinese pricing.”
Baoshan Steel fell 1.1 percent to close at 6.21 yuan in Shanghai after the Shanghai Securities News reported it may cut automotive steel prices by 1,300 yuan a ton, or 17 percent. The benchmark Shanghai Composite Index was up 0.04 percent.
The steelmaker reduced other cold-rolled prices by 400 yuan to 1,000 yuan, and zinc-galvanized steel by 300 yuan to 800 yuan, it said on the website. It lowered heavy plate prices by 200 yuan a ton.
Chinese steel prices have fallen 8.8 percent from an 18-month high on April 15. Demand is declining because of automotive inventories and government curbs on property loans, Wuhan Iron & Steel Group, the nation’s third-biggest steelmaker, said last month.
Passenger-car sales growth in China slowed in May, according to data from the China Automotive Technology & Research Center this week. Sales of cars, sport-utility vehicles and multipurpose vehicles rose 25 percent from a year earlier in May, compared with a 34 percent growth in April.
Inventories of steel products, including reinforcing bars used in construction, rose last month in China, Hebei Iron & Steel Co.’s Board Secretary Li Bohai said today in an online conference with investors.