Baoshan Iron & Steel Co., China’s biggest publicly traded steelmaker, raised prices for a second time in a month as iron ore at a 15-month high increased costs.
The company raised prices for hot-rolled products and most cold-rolled products by 200 yuan ($32) a metric ton for March delivery, Shanghai-based Baosteel Steel said today on its website. It raised prices by as much as 160 yuan for February delivery on Jan. 7.
Spot iron ore delivered to ports in China surged to $158.50 a dry ton on Jan. 8, the highest since Oct. 13, 2011, outpacing the increase in prices and eroding profit margin at steelmakers. Baoshan buys imported ore at contract prices that lags gains in the spot market.
“Baoshan is under mounting pressure to pass on the higher costs,” said Li Xiaolu, a Shanghai-based analyst with Capital Securities Co. “It raised the monthly prices earlier than expected.”
Baoshan fell 0.6 percent to 4.96 yuan as of 11:27 a.m. in Shanghai trading. The benchmark Shanghai Composite Index added 0.08 percent.
Ore with 62 percent iron content delivered to China’s northern port of Tianjin jumped 83 percent to $158.50 a dry ton Jan. 8, rebounding from an almost three-year low reached on Sept. 5, according to a gauge compiled by The Steel Index Ltd. Steelmakers including Hebei Iron & Steel Group and Maanshan Iron & Steel Co. said earlier this month that the iron ore rally would stop Chinese mills from rebuilding inventories. Ore prices added 0.6 percent to $145.9 a ton Jan. 21.
Chinese prices for hot-rolled coil, a benchmark product, have rallied 23 percent to 4,064 yuan a ton since Sept. 5, according to the Beijing Antaike Information Development Co.