Mon Dec 12, 2011
SHANGHAI Dec 12 (Reuters) - China's Baoshan Iron & Steel will raise prices for some main steel products for January bookings, the company said on Monday, signalling that steel demand may improve at the beginning of the new year.
The company plans to keep hot-rolled coil prices flat but will raise cold-rolled coil by 100 yuan per tonne ($16) and some electro galvanized steel prices by 100-200 yuan per tonne, after it cut main steel product prices by 200-300 yuan in December from November.
The firm, also known as Baosteel, is the country's biggest listed steelmaker and its pricing is often seen as a barometer of China's steel market. ($1 = 6.3647 Chinese yuan)
(sourced Reuters)
Showing posts with label Baoshan Iron and Steel Co.. Show all posts
Showing posts with label Baoshan Iron and Steel Co.. Show all posts
Monday, December 12, 2011
Friday, November 11, 2011
Baosteel cuts HR and CR prices by USD 32 and USD 48 per tonne
Friday, 11 Nov 2011
China's Baoshan Iron & Steel will cut its main product prices for December bookings, a move reflecting the weakness in steel demand in the final month of 2011.
The company plans to slash hot-rolled coil prices by CNY 200 per tonne (USD 32) and cold rolled coil prices by CNY 300 per tonne (USD 48), after it kept its main steel product prices unchanged in November from October.
Baosteel pricing is often seen as a barometer of China's steel industry.
(Sourced from Reuters)
China's Baoshan Iron & Steel will cut its main product prices for December bookings, a move reflecting the weakness in steel demand in the final month of 2011.
The company plans to slash hot-rolled coil prices by CNY 200 per tonne (USD 32) and cold rolled coil prices by CNY 300 per tonne (USD 48), after it kept its main steel product prices unchanged in November from October.
Baosteel pricing is often seen as a barometer of China's steel industry.
(Sourced from Reuters)
Monday, October 31, 2011
China Seeks New Iron Ore Price Model, Holds Talks With Miners
Monday,Oct 31,2011 |By Bloomberg News
China, the world’s biggest iron ore buyer, said it’s held talks with Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP) to set up a new pricing mechanism after a plunge in cash market prices.
“We hope to build a new stable, transparent, fair and reasonable pricing mechanism,” Zhang Changfu, vice chairman and secretary general of the China Iron and Steel Association, told reporters today in Beijing. “We wish to make it more well- organized and healthy.”
Iron ore prices for immediate delivery fell 32 percent this month on China’s credit tightening and slowing steel demand from builders and automakers. Most Chinese customers are seeking to replace quarterly contracts with spot pricing, the largest ore producer, Vale, said last week.
Baoshan Iron & Steel Co., China’s biggest mill, is in talks with Vale on fourth-quarter ore prices, and expects its raw- material costs to drop under a new pricing model, General Manager Ma Guoqiang said today in a webcast meeting with investors. He didn’t provide further details on the new model.
Vale, together with BHP and Rio, in 2010 abandoned a 40- year custom of setting prices annually in favor of quarterly iron ore contracts as spot prices gained. The quarterly contracts are based on a three-month average of spot price indexes for the period ending a month before the onset of the new quarter.
Accelerating Moves
The plunge in iron ore prices is accelerating a move to shorter pricing methods and closer to spot, Rio’s Chief Executive Officer Tom Albanese told analysts last week. Rio, the second-largest iron ore producer, sold about 86 percent of its output on a quarterly basis, he said.
BHP, the world’s largest mining company and third biggest iron ore producer, is selling the “vast majority” of its iron ore on monthly prices, Chief Executive Officer Marius Kloppers said this month. The top three producers control about 62 percent of the total seaborne trade, according to Bloomberg Industries.
Iron ore prices may drop to as low as $95 a metric ton, the lowest in more than two years, in the short term before rebounding next year, Morgan Stanley analysts Peter Richardson and Joel Crane said today in an e-mailed report. They traded at $116.90 a ton on Oct. 28, according to The Steel Index Ltd. and have fallen for 15 days, the longest streak since July 2010,
’Turning Point’
The “turning point” of a global iron ore shortage may come at the end of next year or 2013 as new mining projects come on stream, Baoshan’s Ma said today. The company had previously forecast the market to move into surplus in 2014.
Rising competition and raw material costs squeezed profit margins for China’s medium and large steelmakers to 2.53 percent in September and 2.99 percent in the first nine months, Ma said. Shanghai-based Baoshan’s profit fell 51 percent to 1.24 billion yuan in the third quarter from a year ago, the company said Oct. 28.
Chinese prices of hot-rolled coil, a benchmark product, gained 2.2 percent last week, the first weekly gain since the start of September, narrowing the price decline to 13 percent in the past two months, according to researcher Beijing Antaike Information Development Co.
China’s Hebei province, the biggest steelmaking region, has shuttered more than 20 iron furnaces and 20 rolling plants, partly because of the price plunge, CISA’s Zhang said today.
China, the world’s biggest iron ore buyer, said it’s held talks with Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP) to set up a new pricing mechanism after a plunge in cash market prices.
“We hope to build a new stable, transparent, fair and reasonable pricing mechanism,” Zhang Changfu, vice chairman and secretary general of the China Iron and Steel Association, told reporters today in Beijing. “We wish to make it more well- organized and healthy.”
Iron ore prices for immediate delivery fell 32 percent this month on China’s credit tightening and slowing steel demand from builders and automakers. Most Chinese customers are seeking to replace quarterly contracts with spot pricing, the largest ore producer, Vale, said last week.
Baoshan Iron & Steel Co., China’s biggest mill, is in talks with Vale on fourth-quarter ore prices, and expects its raw- material costs to drop under a new pricing model, General Manager Ma Guoqiang said today in a webcast meeting with investors. He didn’t provide further details on the new model.
Vale, together with BHP and Rio, in 2010 abandoned a 40- year custom of setting prices annually in favor of quarterly iron ore contracts as spot prices gained. The quarterly contracts are based on a three-month average of spot price indexes for the period ending a month before the onset of the new quarter.
Accelerating Moves
The plunge in iron ore prices is accelerating a move to shorter pricing methods and closer to spot, Rio’s Chief Executive Officer Tom Albanese told analysts last week. Rio, the second-largest iron ore producer, sold about 86 percent of its output on a quarterly basis, he said.
BHP, the world’s largest mining company and third biggest iron ore producer, is selling the “vast majority” of its iron ore on monthly prices, Chief Executive Officer Marius Kloppers said this month. The top three producers control about 62 percent of the total seaborne trade, according to Bloomberg Industries.
Iron ore prices may drop to as low as $95 a metric ton, the lowest in more than two years, in the short term before rebounding next year, Morgan Stanley analysts Peter Richardson and Joel Crane said today in an e-mailed report. They traded at $116.90 a ton on Oct. 28, according to The Steel Index Ltd. and have fallen for 15 days, the longest streak since July 2010,
’Turning Point’
The “turning point” of a global iron ore shortage may come at the end of next year or 2013 as new mining projects come on stream, Baoshan’s Ma said today. The company had previously forecast the market to move into surplus in 2014.
Rising competition and raw material costs squeezed profit margins for China’s medium and large steelmakers to 2.53 percent in September and 2.99 percent in the first nine months, Ma said. Shanghai-based Baoshan’s profit fell 51 percent to 1.24 billion yuan in the third quarter from a year ago, the company said Oct. 28.
Chinese prices of hot-rolled coil, a benchmark product, gained 2.2 percent last week, the first weekly gain since the start of September, narrowing the price decline to 13 percent in the past two months, according to researcher Beijing Antaike Information Development Co.
China’s Hebei province, the biggest steelmaking region, has shuttered more than 20 iron furnaces and 20 rolling plants, partly because of the price plunge, CISA’s Zhang said today.
Wednesday, October 12, 2011
Iron Ore-Shanghai rebar hits contract low, ore extends losses
Wed Oct 12, 2011
* China mills seen cutting steel production
* Baosteel says to keep prices unchanged
By Manolo Serapio Jr
SINGAPORE, Oct 12 (Reuters) - Benchmark China steel futures fell to their lowest ever on Wednesday as weaker demand put further pressure on prices and will likely curb output in the world's top consumer and producer.
Baoshan Iron and Steel , China's biggest listed steelmaker, said it will keep prices of its main products unchanged next month after raising them in September and October, reflecting caution amid slower domestic appetite.
The most briskly traded January rebar contract on the Shanghai Futures Exchange fell as low as 4,255 yuan a tonne, the weakest level for the contract. By 0307 GMT, it was down 0.2 percent at 4,315 yuan.
Rebar, used in construction, dropped more than 11 percent in September, its biggest monthly loss ever, as tighter credit in China thinned demand for steel and a construction boom that fuelled a record production pace earlier in the year lost steam.
"We are going to see some production cuts definitely with steel prices at these levels. Some mills, especially the marginal producers, are not making money anymore," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
"Sentiment is quite bearish. We have not yet seen the bottom of the steel market."
China's average daily crude steel output declined 2.3 percent to 1.919 million tonnes in mid-September from the previous 10 days, industry data showed last month.
Prices of iron ore, the key component in making steel, may continue to fall if No. 1 buyer China cuts steel output.
Index-based spot iron ore prices, based on Chinese transactions and used by global miners in fixing supply contracts, slid on Tuesday to their lowest since March.
Iron ore with 62 percent iron content fell 1.3 percent to $164.40 a tonne, according to the Steel Index .IO62-CNI=SI and was down 1 percent at $165.25 based on Platts IODBZ00-PLT.
Metal Bulletin's similar gauge .IO62-CNO=MB dropped 1.3 percent to $165.26.
Prices of forward swaps <0#SGXIOS:> also extended losses, with the Singapore Exchange-cleared October contract down $2.58 to $161.67 a tonne and November falling more than $4 to $154.17, as buyers bet on a further decline in spot rates.
"I'm not confident about the market. There will be much less demand in winter because most construction activities will stop," said a Shanghai-based iron ore trader.
But the trader said cuts in China's steel output, if done aggressively, may allow prices to recover as mills rely on product inventories, tightening supply.
"That can help balance the market and boost demand again for iron ore," he said."
(sourced Reuters)
* China mills seen cutting steel production
* Baosteel says to keep prices unchanged
By Manolo Serapio Jr
SINGAPORE, Oct 12 (Reuters) - Benchmark China steel futures fell to their lowest ever on Wednesday as weaker demand put further pressure on prices and will likely curb output in the world's top consumer and producer.
Baoshan Iron and Steel , China's biggest listed steelmaker, said it will keep prices of its main products unchanged next month after raising them in September and October, reflecting caution amid slower domestic appetite.
The most briskly traded January rebar contract on the Shanghai Futures Exchange fell as low as 4,255 yuan a tonne, the weakest level for the contract. By 0307 GMT, it was down 0.2 percent at 4,315 yuan.
Rebar, used in construction, dropped more than 11 percent in September, its biggest monthly loss ever, as tighter credit in China thinned demand for steel and a construction boom that fuelled a record production pace earlier in the year lost steam.
"We are going to see some production cuts definitely with steel prices at these levels. Some mills, especially the marginal producers, are not making money anymore," said Henry Liu, regional head of commodity research at Mirae Asset Securities in Hong Kong.
"Sentiment is quite bearish. We have not yet seen the bottom of the steel market."
China's average daily crude steel output declined 2.3 percent to 1.919 million tonnes in mid-September from the previous 10 days, industry data showed last month.
Prices of iron ore, the key component in making steel, may continue to fall if No. 1 buyer China cuts steel output.
Index-based spot iron ore prices, based on Chinese transactions and used by global miners in fixing supply contracts, slid on Tuesday to their lowest since March.
Iron ore with 62 percent iron content fell 1.3 percent to $164.40 a tonne, according to the Steel Index .IO62-CNI=SI and was down 1 percent at $165.25 based on Platts IODBZ00-PLT.
Metal Bulletin's similar gauge .IO62-CNO=MB dropped 1.3 percent to $165.26.
Prices of forward swaps <0#SGXIOS:> also extended losses, with the Singapore Exchange-cleared October contract down $2.58 to $161.67 a tonne and November falling more than $4 to $154.17, as buyers bet on a further decline in spot rates.
"I'm not confident about the market. There will be much less demand in winter because most construction activities will stop," said a Shanghai-based iron ore trader.
But the trader said cuts in China's steel output, if done aggressively, may allow prices to recover as mills rely on product inventories, tightening supply.
"That can help balance the market and boost demand again for iron ore," he said."
(sourced Reuters)
Monday, August 22, 2011
Tokyo Steel prices cut,H-beam down Y2,000/T
Mon Aug 22, 2011
* Second price cut this year to fend off imports
* Price cut slightly smaller than market expected
TOKYO Aug 22 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steel maker, said on Monday it will cut product prices for the second time this year as the yen's rise has opened up a big price gap between domestic products and imports.
The company will cut prices by 2,000-4,000 yen ($26-52) per tonne for September, or 2 to 5 percent, its second across-the-board price cut in three months.
The price cut was slightly smaller than the market expectations of around 3,000-5,000 yen.
"There are signs of a pickup in demand as carmakers are ramping up production and large development projects in the Tokyo area are about to start," Tokyo Steel director Naoto Ohori told a news conference. "We need to head off imports to tap this demand."
The company cut its price for H-beams, a key product used in construction, by 2.6 percent to 74,000 yen ($971) per tonne from 76,000 yen, after keeping prices unchanged for three months.
Japan's imports of steel products, mostly hot- and cold-rolled coils, rose in June to an almost six-year high of 420,000 tonnes. China's steel exports exceeded 4 million tonnes for the fourth straight month in June as domestic demand slowed, causing an oversupply in Asian markets. South Korea is also boosting exports.
Tokyo Steel's move is in contrast with Asia' other big exporters, which are beginning to raise prices to offset high input costs.
Baoshan Iron & Steel Co Ltd , China's top listed steelmaker, said this month it will raise prices of its main products for September bookings, in anticipation that demand will pick up in the peak consumption season.
Nippon Steel Corp , Japan's top maker of H-beams, is currently operating at 30 percent of its H-beam capacity in an attempt to tighten the market.
The company this month said its inventories of H-beam steel for spot customers fell 4.2 percent to 206,300 tonnes at the end of July, the first decrease in seven months but still at a high level. ($1 = 76.245 Japanese Yen)
(sourced Reuters)
* Second price cut this year to fend off imports
* Price cut slightly smaller than market expected
TOKYO Aug 22 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steel maker, said on Monday it will cut product prices for the second time this year as the yen's rise has opened up a big price gap between domestic products and imports.
The company will cut prices by 2,000-4,000 yen ($26-52) per tonne for September, or 2 to 5 percent, its second across-the-board price cut in three months.
The price cut was slightly smaller than the market expectations of around 3,000-5,000 yen.
"There are signs of a pickup in demand as carmakers are ramping up production and large development projects in the Tokyo area are about to start," Tokyo Steel director Naoto Ohori told a news conference. "We need to head off imports to tap this demand."
The company cut its price for H-beams, a key product used in construction, by 2.6 percent to 74,000 yen ($971) per tonne from 76,000 yen, after keeping prices unchanged for three months.
Japan's imports of steel products, mostly hot- and cold-rolled coils, rose in June to an almost six-year high of 420,000 tonnes. China's steel exports exceeded 4 million tonnes for the fourth straight month in June as domestic demand slowed, causing an oversupply in Asian markets. South Korea is also boosting exports.
Tokyo Steel's move is in contrast with Asia' other big exporters, which are beginning to raise prices to offset high input costs.
Baoshan Iron & Steel Co Ltd , China's top listed steelmaker, said this month it will raise prices of its main products for September bookings, in anticipation that demand will pick up in the peak consumption season.
Nippon Steel Corp , Japan's top maker of H-beams, is currently operating at 30 percent of its H-beam capacity in an attempt to tighten the market.
The company this month said its inventories of H-beam steel for spot customers fell 4.2 percent to 206,300 tonnes at the end of July, the first decrease in seven months but still at a high level. ($1 = 76.245 Japanese Yen)
(sourced Reuters)
Tuesday, August 16, 2011
China steel mills raise Sept product prices as demand picks up
Tue Aug 16, 2011
* More steel mills follow Baosteel with similar price rises
* Steel demand to stay firm on solid economy growth
* Steel inventories down 3.24 pct in July from June
* Iron ore price up 1.5 pct in July (Adds CISA monthly report)
By Ruby Lian and Jacqueline Wong
SHANGHAI, Aug 16 (Reuters) - More of China's leading steel mills have decided to raise prices of their main products for September bookings, aiming to catch up with rising spot market prices and in anticipation of stronger demand next month.
Two leading mills, Wuhan Iron & Steel Co Ltd and Beijing Shougang Co Ltd , will raise September prices for their main flat steel products in the wake of a similar move by Baoshan Iron & Steel Co Ltd (Baosteel) last Friday to take advantage of growing demand.
"Price rises by steel mills reflect climbing prices in the spot market since the end of July as steel mills received strong bookings in August. Steel prices are expected to increase next month as traders and end users need to build up stocks as demand improves," said Bill Chen, a senior trader with Hong Kong-based Smart Timing Steel Ltd.
Baosteel, the country's biggest-listed steelmaker, said last Friday that it would raise prices for hot-rolled coil by 60 yuan ($9) per tonne and cold-rolled coil prices by 120 yuan per tonne for September, in line with market expectations.
Baosteel usually sets the tone in pricing direction for the domestic steel market, followed by domestic rivals.
Wuhan Steel, the country's third-largest producer, plans to raise hot-rolled coil prices by 100 yuan per tonne and cold-rolled coil prices by 120 yuan per tonne, respectively, in line with Baosteel's increases.
Shougang will lift cold-rolled coil prices by 50 yuan per tonne, but has yet to make a decision on hot-rolled coil.
Another major mill, Angang Steel Co Ltd is expected to announce new prices later this week.
STEEL DEMAND TO REMAIN STRONG
Steel demand in China is expected to remain robust as the world's second-largest economy aims to maintain strong growth boosted by its continued investment in urbanisation and industrialisation, the China Iron & Steel Association (CISA) said on Tuesday.
"The engine driving up China's economic growth will still be powerful due to rapid investment growth, which will support steel demand in the near future," CISA said in a monthly report published on its website.
CISA also expects that China's steel exports will continue to stay relatively high, supporting steel demand.
China's economy would grow 9.2 percent in the third quarter, slightly down from the first two quarters of the year, a think tank under China's National Development and Reform Commission, the economic planning agency, said in a report.
Inventories of five main steel products - hot-rolled coil, cold-rolled coil, plate, wire rod and rebar - fell for the fourth straight month by 3.24 percent to 13.85 million tonnes in 26 major cities by end of July from the previous month.
"Large-scale construction of social housing and water conservancy as well as railway projects will continue to boost demand for construction steel products, while flat steel product mills will face growing competition as its end users including shipbuilding, auto and machinery see slower growth," CISA said.
Data from the report also showed that rebar spot prices rose 0.85 percent at end July from a month ago, wire rod price gained 1.51 percent and hot-rolled coil price rose 0.43 percent during the same period, while almost all other flat steel products fell modestly in July.
"Chinese steel mills will still face high production costs in the near future, narrowing the room for prices to fall in a large way," CISA added.
Prices of spot iron ore gained 1.5 percent in July from June, while coking coal prices jumped 2 percent from a month earlier. ($1 = 6.390 yuan)
(sourced Reuters)
* More steel mills follow Baosteel with similar price rises
* Steel demand to stay firm on solid economy growth
* Steel inventories down 3.24 pct in July from June
* Iron ore price up 1.5 pct in July (Adds CISA monthly report)
By Ruby Lian and Jacqueline Wong
SHANGHAI, Aug 16 (Reuters) - More of China's leading steel mills have decided to raise prices of their main products for September bookings, aiming to catch up with rising spot market prices and in anticipation of stronger demand next month.
Two leading mills, Wuhan Iron & Steel Co Ltd and Beijing Shougang Co Ltd , will raise September prices for their main flat steel products in the wake of a similar move by Baoshan Iron & Steel Co Ltd (Baosteel) last Friday to take advantage of growing demand.
"Price rises by steel mills reflect climbing prices in the spot market since the end of July as steel mills received strong bookings in August. Steel prices are expected to increase next month as traders and end users need to build up stocks as demand improves," said Bill Chen, a senior trader with Hong Kong-based Smart Timing Steel Ltd.
Baosteel, the country's biggest-listed steelmaker, said last Friday that it would raise prices for hot-rolled coil by 60 yuan ($9) per tonne and cold-rolled coil prices by 120 yuan per tonne for September, in line with market expectations.
Baosteel usually sets the tone in pricing direction for the domestic steel market, followed by domestic rivals.
Wuhan Steel, the country's third-largest producer, plans to raise hot-rolled coil prices by 100 yuan per tonne and cold-rolled coil prices by 120 yuan per tonne, respectively, in line with Baosteel's increases.
Shougang will lift cold-rolled coil prices by 50 yuan per tonne, but has yet to make a decision on hot-rolled coil.
Another major mill, Angang Steel Co Ltd is expected to announce new prices later this week.
STEEL DEMAND TO REMAIN STRONG
Steel demand in China is expected to remain robust as the world's second-largest economy aims to maintain strong growth boosted by its continued investment in urbanisation and industrialisation, the China Iron & Steel Association (CISA) said on Tuesday.
"The engine driving up China's economic growth will still be powerful due to rapid investment growth, which will support steel demand in the near future," CISA said in a monthly report published on its website.
CISA also expects that China's steel exports will continue to stay relatively high, supporting steel demand.
China's economy would grow 9.2 percent in the third quarter, slightly down from the first two quarters of the year, a think tank under China's National Development and Reform Commission, the economic planning agency, said in a report.
Inventories of five main steel products - hot-rolled coil, cold-rolled coil, plate, wire rod and rebar - fell for the fourth straight month by 3.24 percent to 13.85 million tonnes in 26 major cities by end of July from the previous month.
"Large-scale construction of social housing and water conservancy as well as railway projects will continue to boost demand for construction steel products, while flat steel product mills will face growing competition as its end users including shipbuilding, auto and machinery see slower growth," CISA said.
Data from the report also showed that rebar spot prices rose 0.85 percent at end July from a month ago, wire rod price gained 1.51 percent and hot-rolled coil price rose 0.43 percent during the same period, while almost all other flat steel products fell modestly in July.
"Chinese steel mills will still face high production costs in the near future, narrowing the room for prices to fall in a large way," CISA added.
Prices of spot iron ore gained 1.5 percent in July from June, while coking coal prices jumped 2 percent from a month earlier. ($1 = 6.390 yuan)
(sourced Reuters)
Friday, August 12, 2011
Baosteel raises main product prices for September
Fri Aug 12, 2011
* Hot-rolled coil prices for structural use up 60 yuan/T
* Cold-rolled coil prices to rise 120 yuan/T
* Demand for flat products set to pick up after summer
By Ruby Lian and Jacqueline Wong
SHANGHAI, Aug 12 (Reuters) - Baoshan Iron & Steel Co Ltd , China's top listed steelmaker, said on Friday that it will raise prices of its main products for September bookings, in anticipation that demand will pick up in the peak consumption season.
Traders and analysts have forecast steel demand to warm up in September after flat steel producers, mainly state-owned majors, faced shrinking margins on high iron ore costs and weak downstream demand from automakers to producers of home appliances.
"The traditional peak consumption season is approaching, and demand for flat steel products will improve in September," said Hu Zhengwu, researcher with consultancy Custeel.com.
In an announcement on its website (www.bsteel.com.cn), Baosteel said prices of hot-rolled products for structural use would rise by 60 yuan ($9) per tonne, and other grades would remain steady.
Prices for cold-rolled steel would rise by 120 yuan per tonne, it said, after keeping prices for its main products mostly unchanged for August.
Domestic car sales in July rose 6.7 percent from a year earlier to 1.01 million units, picking up momentum from the previous month, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.
Daily steel output has stood at more than 1.9 million tonnes since February as steel mills raised production to meet strong demand from the construction sector.
"Flat product demand hasn't picked up substantially yet, but I expect the market will improve in the fourth quarter and steel mills will see higher margins," said a trader in Beijing. "Uncertainty in the global economy will weigh on the steel market."
Baosteel's pricing moves usually set the tone for the industry as a whole, and other mills are likely to follow suit in expectation of increased demand after the summer.
The company also said it would raise the price of hot-dipped galvanised coil by 150-200 yuan per tonne and maintain plate prices unchanged for September.($1=6.394 yuan, sourced Reuters)
* Hot-rolled coil prices for structural use up 60 yuan/T
* Cold-rolled coil prices to rise 120 yuan/T
* Demand for flat products set to pick up after summer
By Ruby Lian and Jacqueline Wong
SHANGHAI, Aug 12 (Reuters) - Baoshan Iron & Steel Co Ltd , China's top listed steelmaker, said on Friday that it will raise prices of its main products for September bookings, in anticipation that demand will pick up in the peak consumption season.
Traders and analysts have forecast steel demand to warm up in September after flat steel producers, mainly state-owned majors, faced shrinking margins on high iron ore costs and weak downstream demand from automakers to producers of home appliances.
"The traditional peak consumption season is approaching, and demand for flat steel products will improve in September," said Hu Zhengwu, researcher with consultancy Custeel.com.
In an announcement on its website (www.bsteel.com.cn), Baosteel said prices of hot-rolled products for structural use would rise by 60 yuan ($9) per tonne, and other grades would remain steady.
Prices for cold-rolled steel would rise by 120 yuan per tonne, it said, after keeping prices for its main products mostly unchanged for August.
Domestic car sales in July rose 6.7 percent from a year earlier to 1.01 million units, picking up momentum from the previous month, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.
Daily steel output has stood at more than 1.9 million tonnes since February as steel mills raised production to meet strong demand from the construction sector.
"Flat product demand hasn't picked up substantially yet, but I expect the market will improve in the fourth quarter and steel mills will see higher margins," said a trader in Beijing. "Uncertainty in the global economy will weigh on the steel market."
Baosteel's pricing moves usually set the tone for the industry as a whole, and other mills are likely to follow suit in expectation of increased demand after the summer.
The company also said it would raise the price of hot-dipped galvanised coil by 150-200 yuan per tonne and maintain plate prices unchanged for September.($1=6.394 yuan, sourced Reuters)
Thursday, March 17, 2011
Asia Steel-Spot prices steady, eyeing Japan quake
Thu Mar 17, 2011 7:29am GMT
* Steelmakers and traders eyeing Japan quake
* Steel demand likely to take longer time to recover
By Ruby Lian and David Stanway
SHANGHAI, March 17 (Reuters) - Spot steel prices in China remained steady this week, with traders still assessing the impact of the Japanese earthquake on the steel market, as well as a move by top steel mills to keep prices for April unchanged.
Rebar, mostly used in the construction sector, rebounded modestly to 4,580-4,590 yuan ($697-698) per tonne on Thursday, down 10 yuan from last Thursday after slipping nearly 2 percent at the beginning of the week, industry consultancy Mysteel said.
The catastrophic earthquake and tsunami in Japan have further weighed on the global steel market, adding to concern about weak demand brought about by tighter credit and lower iron ore prices.
"Most market players are still assessing the aftermath of Japan's earthquake, while steel mills are watching the crisis closely and are hesitant to make offers, although prices have bounced back slightly," said Bill Chen, a senior trader with Hong Kong-based Smart Timing Steel Ltd.
Key Japanese steelmakers have halted operations at some of their facilities since Monday because of power outages brought about by the quake.
Luo Bingsheng, former vice-chairman of the China Iron & Steel Association and now an advisor, said at an industry conference on Thursday that Japan's post-quake reconstruction would eventually lift global steel prices and benefit Chinese steel exports.
His speech was made available on the organiser's website (Umetal.com).
The most active rebar contract on the Shanghai Futures Exchange recovered this week to 4,817 yuan per tonne, up 2.9 percent from last Thursday.
DEMAND RECOVERY STILL SLOW
Two of China's biggest steelmakers, Baoshan Iron & Steel Co Ltd and Wuhan Iron & Steel Co Ltd said this week that they would keep their main product prices stable for April, reflecting their concern about tepid demand and high stockpiles.
Demand is expected to pick up in the second quarter as end users normally return to the market to restock, but government moves to further tighten liquidity are likely to curb the recovery.
"We believe steel prices will stay at a low level for a month or two -- a rebound is unlikely because of strong supply and lukewarm demand," said Henry Liu, a commodities analyst with Mirae Asset in Hong Kong.
CISA's Luo also said the inventories of 78 medium-sized and large steel mills surged 20 percent over the first two months of the year, and some steel mills would likely suffer losses.
Inventory building by end users was unlikely to continue, and even if steel prices rebounded they were not expected to return to their February high, Liu said.
In its monthly market report published on Thursday, CISA said stockpiles remained high going into March, and that prices would be put under further pressure as a result of still excessive output levels and increases in raw material supplies. $1=6.571 yuan) (Editing by Chris Lewis, Reuters)
Rebar, mostly used in the construction sector, rebounded modestly to 4,580-4,590 yuan ($697-698) per tonne on Thursday, down 10 yuan from last Thursday after slipping nearly 2 percent at the beginning of the week, industry consultancy Mysteel said.
The catastrophic earthquake and tsunami in Japan have further weighed on the global steel market, adding to concern about weak demand brought about by tighter credit and lower iron ore prices.
"Most market players are still assessing the aftermath of Japan's earthquake, while steel mills are watching the crisis closely and are hesitant to make offers, although prices have bounced back slightly," said Bill Chen, a senior trader with Hong Kong-based Smart Timing Steel Ltd.
Key Japanese steelmakers have halted operations at some of their facilities since Monday because of power outages brought about by the quake.
Luo Bingsheng, former vice-chairman of the China Iron & Steel Association and now an advisor, said at an industry conference on Thursday that Japan's post-quake reconstruction would eventually lift global steel prices and benefit Chinese steel exports.
His speech was made available on the organiser's website (Umetal.com).
The most active rebar contract on the Shanghai Futures Exchange recovered this week to 4,817 yuan per tonne, up 2.9 percent from last Thursday.
DEMAND RECOVERY STILL SLOW
Two of China's biggest steelmakers, Baoshan Iron & Steel Co Ltd and Wuhan Iron & Steel Co Ltd said this week that they would keep their main product prices stable for April, reflecting their concern about tepid demand and high stockpiles.
Demand is expected to pick up in the second quarter as end users normally return to the market to restock, but government moves to further tighten liquidity are likely to curb the recovery.
"We believe steel prices will stay at a low level for a month or two -- a rebound is unlikely because of strong supply and lukewarm demand," said Henry Liu, a commodities analyst with Mirae Asset in Hong Kong.
CISA's Luo also said the inventories of 78 medium-sized and large steel mills surged 20 percent over the first two months of the year, and some steel mills would likely suffer losses.
Inventory building by end users was unlikely to continue, and even if steel prices rebounded they were not expected to return to their February high, Liu said.
In its monthly market report published on Thursday, CISA said stockpiles remained high going into March, and that prices would be put under further pressure as a result of still excessive output levels and increases in raw material supplies. $1=6.571 yuan) (Editing by Chris Lewis, Reuters)
Tuesday, February 15, 2011
Chinese steelmakers lift March prices on high cost
Tue Feb 15, 2011 6:42am GMT* Main product prices up around 300 yuan/tonne
* Price increases in line with expectations
* Analysts show concerns of correction
(Combines price changes by Baosteel and Nippon, adds details, analysts' comments)
By Ruby Lian and Jason Subler
SHANGHAI, Feb 15 (Reuters) - Two top Chinese steelmakers will raise their main product prices for the third month in a row in March, a widely-expected move to cope with surging raw material costs and to reflect a positive outlook for demand.
Asian steelmakers have struggled with surging costs of coking coal and iron ore amid a supply squeeze over the past few months.
The devastating floods in Queensland in Australia have sent coking coal prices up by around one third while export restrictions from India have contributed to a jump of more than 10 percent in iron ore prices since the beginning of the year.
The country's top listed steelmaker, Baoshan Iron & Steel (Baosteel) , said on Tuesday it would follow Monday's move by its rival Wuhan Steel , China's No.3 producer, and lift March prices for key products.
Baosteel will raise prices for hot-rolled coil by 300 yuan ($45.48) per tonne, while prices for cold-rolled coil will go up by 260-300 yuan per tonne. Wuhan raised both by 300 yuan.
"The increases are within expectation as recovering orders from downstream sectors and higher raw materials costs have forced domestic steelmakers to raise prices," said Hu Yanping, an analyst with industry consultancy Custeel.com.
Despite the high cost of iron ore, China imported a record 69.0 million tonnes of the material in January, Chinese customs data showed on Monday. The monthly value of shipments rose for the third month in a row, skyrocketing to a record of $10.4 billion.
"We expect the problem with refractory material (cost-push and technical issues) to last for a while and prices for HRC/CRC could increase in short run," Citi Investment Research & Analysis said in a research note.
Baosteel's shares were 0.4 percent higher by 0548 GMT while the broader benchmark index gained 1.0 percent.
HEADWIND IN MARCH?
Spot iron ore prices rose to fresh record highs and were likely to extend their winning streak on Tuesday, prompting Asian steelmakers to increase product prices.
Outside of China, Japan's top steelmaker Nippon Steel Corp also raised February contract price for H-beam steel by 3-4 percent, joining the battle to pass on surging upstream raw materials costs to end users.
The most active October rebar futures on the Shanghai Futures Exchange touched a high of 5,196 yuan per tonne on Tuesday, near the record 5,230 yuan hit last Friday.
Despite sharp gains, some analysts believe the post-holiday rally in steel prices is likely to come to an end in March as traders and end users may not be able to accept aggressive price hikes as the intensifying monetary tightening measures continues to weigh on prices and demand.
Chinese inflation was lower than expected at 4.9 percent in the year to January, but price pressures continued to build and will force the central bank to stick to its course of monetary tightening.
"The most serious threat to the current steel price is the accelerating production pace of private steel mills," Henry Liu, head of Commodities/Metals & Mining of Hong Kong-based Mirae Asset, said in a research report.
"Steel mills are recklessly boosting their ex-factory prices, which further squeezes the margins of traders. The party will come to an end when traders find it difficult to finance their inventories," Liu added.
Citi also noted that marginal producers' cash profit for rebar continues shrinking as leading steel mills mainly produce high-end flat products. ($1=6.596 Yuan)
(Reporting by Ruby Lian,Jason Subler, Editing by Kazunori Takada, Himani Sarkar,sourced:reuters)
Tags:Chinese steelmakers, March 2011 contract prices, raw material, strong demand, coking coal, Baoshan Iron and Steel Co., Citi Investment, Nippon Steel Corp, Shanghai Futures Exchange, import export, steel mills
Baosteel and Wuhan raise HR prices by USD 45 per tonne
Tuesday, 15 Feb 2011
It is reported that two of Chinese domestic giant steelmakers, Baoshan Iron & Steel and Wuhan Iron & Steel Co will raise EXW prices for HR steel for March bookings by around CNY 300 per tonne (USD 45) per tonne.
It is reported that two of Chinese domestic giant steelmakers, Baoshan Iron & Steel and Wuhan Iron & Steel Co will raise EXW prices for HR steel for March bookings by around CNY 300 per tonne (USD 45) per tonne.
Monday, February 14, 2011
FITCH affirms Baosteel at A-, outlook stable
Mon Feb 14, 2011 6:13am GMT
(The following was released by the rating agency)
(The following was released by the rating agency)
February 14 (Fitch) Fitch Ratings has affirmed China-based Baoshan Iron & Steel Company Limited's (Baosteel) Long-term foreign currency Issuer Default Rating (IDR) at 'A-' and Short-term foreign currency IDR at 'F2'. The Outlook is Stable
Using Fitch's Parent and Subsidiary rating Linkage methodology, the 'A-' IDR incorporates a one-notch uplift to Baosteel's standalone rating, reflecting the strong linkages between its state-owned parent Baosteel Group Corporation (BGC) and the Chinese government. This is based on BGC's and Baosteel's strategic importance to the country and potential support from the Chinese government should it be required. BGC, being the largest steel company held by the state-owned Assets Supervision and Administration Commission of the State Council, has been identified by the Chinese government to lead the restructuring of the country's steel industry - an important priority for China's industrialisation and urbanisation.
Baosteel's standalone rating reflects its position as the leading high value-add steel producer in China. The company has strong market share in its major products such as cold-rolled (CR) auto sheet (with 50% market share), home appliance sheet (37%), and pipeline steel (33%). CR coil products, stainless steel products, and steel tubes contributed to 52% of revenues in 2009. Despite weak CR steel product prices in 2010, Baosteel continued to generate robust revenue and operating profit growth. The company's high average selling price (ASP) for its steel products of CNY6,300 in 2010, based on Fitch estimates, was 26% higher than in 2009, suggesting that Baosteel has continued to enhance its product offerings with high value-added steel products.
Baosteel has maintained a stable financial profile despite a volatile operating environment between 2007 and 2010, relative to other Chinese steel producers and most global steel companies. Baosteel's EBITDA margin ranged from a low of 14% in 2009 to a high of 18% in 2010, whereas Angang Steel Co Ltd's and Wuhan Iron & Steel Co's EBITDA margin over the same period ranged from 24% in 2007 to 12% in 2009 and from 24% in 2007 to 11% in 2010 respectively. Capex and dividend payment have been reduced in response to the decline in EBITDA in 2009, alongside working capital reduction, which helped reduce Baosteel's debt level. Adjusted net debt/operating EBITDAR fell to 1.52x for the LTM to September 2010 from 2.9x in 2009, after an improved operating environment lifted EBITDAR. Its EBITDA margin improved to 15.8% from 14% during the same period.
Fitch expects steel companies in 2011 at least to maintain their profitability as the steel price increase is likely to offset any raw material cost increases. Baosteel's strong market share in its major products suggests close working relationship with its customers, making it likely for the company to pass on any raw material cost increases to its customers. This is reflected in Baosteel's stable EBITDA margin.
The Stable Outlook reflects Fitch's expectations that the over-supply condition in the Chinese steel industry will improve with the government's restructuring drive and the restriction placed on building new steel plants. Aggressive capex and acquisition of production facilities resulting in declining unit profit or a higher debt burden, and in turn a net debt/EBITDAR exceeding 1.5x on a sustained basis may lead to negative rating action. The ratings may also come under pressure if BGC's support is insufficient to offset a deterioration in the credit profile of Baosteel or if state support for the company is deemed to have weakened. No positive rating action is envisaged in the next 12-18 months.
(sourced:Thomson Reuters)
Using Fitch's Parent and Subsidiary rating Linkage methodology, the 'A-' IDR incorporates a one-notch uplift to Baosteel's standalone rating, reflecting the strong linkages between its state-owned parent Baosteel Group Corporation (BGC) and the Chinese government. This is based on BGC's and Baosteel's strategic importance to the country and potential support from the Chinese government should it be required. BGC, being the largest steel company held by the state-owned Assets Supervision and Administration Commission of the State Council, has been identified by the Chinese government to lead the restructuring of the country's steel industry - an important priority for China's industrialisation and urbanisation.
Baosteel's standalone rating reflects its position as the leading high value-add steel producer in China. The company has strong market share in its major products such as cold-rolled (CR) auto sheet (with 50% market share), home appliance sheet (37%), and pipeline steel (33%). CR coil products, stainless steel products, and steel tubes contributed to 52% of revenues in 2009. Despite weak CR steel product prices in 2010, Baosteel continued to generate robust revenue and operating profit growth. The company's high average selling price (ASP) for its steel products of CNY6,300 in 2010, based on Fitch estimates, was 26% higher than in 2009, suggesting that Baosteel has continued to enhance its product offerings with high value-added steel products.
Baosteel has maintained a stable financial profile despite a volatile operating environment between 2007 and 2010, relative to other Chinese steel producers and most global steel companies. Baosteel's EBITDA margin ranged from a low of 14% in 2009 to a high of 18% in 2010, whereas Angang Steel Co Ltd's and Wuhan Iron & Steel Co's EBITDA margin over the same period ranged from 24% in 2007 to 12% in 2009 and from 24% in 2007 to 11% in 2010 respectively. Capex and dividend payment have been reduced in response to the decline in EBITDA in 2009, alongside working capital reduction, which helped reduce Baosteel's debt level. Adjusted net debt/operating EBITDAR fell to 1.52x for the LTM to September 2010 from 2.9x in 2009, after an improved operating environment lifted EBITDAR. Its EBITDA margin improved to 15.8% from 14% during the same period.
Fitch expects steel companies in 2011 at least to maintain their profitability as the steel price increase is likely to offset any raw material cost increases. Baosteel's strong market share in its major products suggests close working relationship with its customers, making it likely for the company to pass on any raw material cost increases to its customers. This is reflected in Baosteel's stable EBITDA margin.
The Stable Outlook reflects Fitch's expectations that the over-supply condition in the Chinese steel industry will improve with the government's restructuring drive and the restriction placed on building new steel plants. Aggressive capex and acquisition of production facilities resulting in declining unit profit or a higher debt burden, and in turn a net debt/EBITDAR exceeding 1.5x on a sustained basis may lead to negative rating action. The ratings may also come under pressure if BGC's support is insufficient to offset a deterioration in the credit profile of Baosteel or if state support for the company is deemed to have weakened. No positive rating action is envisaged in the next 12-18 months.
(sourced:Thomson Reuters)
Thursday, February 3, 2011
Nippon, Sumitomo Metal merging to create No.2 steelmaker
Thu Feb 3, 2011 10:35am GMT* Merged company would trail only ArcelorMittal in global steel output
* Nippon Steel, Sumitomo Metal aim to merge in Oct 2012
* Japan steelmakers face stiff competition from Asian rivals
* Merged company would have unmatched product lineup - analysts
By Junko Fujita
TOKYO, Feb 3 (Reuters) - Japan's Nippon Steel Corp and Sumitomo Metal Industries plan to merge to create the world's second-largest steelmaker in an effort to fend off tough competition from Asian rivals and offset shrinking demand from domestic automakers.
The deal, which would likely see Japan's top steelmaker Nippon Steel acquiring Sumitomo Metal, comes as the industry grapples with surging raw materials prices, exacerbated recently by floods in Australia.
Japanese steelmakers have been particularly hard hit as domestic automakers such as Toyota Motor Corp and Nissan Motor Co build fewer cars at home and expand in emerging markets such as India using products from local steelmakers.
They also face cut-throat competition from South Korea's POSCO and Baoshan Iron & Steel Co , China's biggest listed steelmaker, as Japanese automakers seek lower prices to weather an unfavorably strong yen.
Analysts, as well as Japanese government officials and politicians, welcomed the plans for the merger, which is subject to approval from Japan's Fair Trade Commission (FTC).
"The new group has a chance to become very competitive in Asia," said CLSA analyst Jeremie Capron, adding there was room for Sumitomo Metal to cut costs with the help of Nippon Steel.
"The merged company will have the best product line-up in the industry ranging from construction steel, auto steel sheets, thick plates to seamless pipes. That's quite unique, and the No.1 company, ArcelorMittal , does not have such a product line-up."
Nippon Steel, whose main customers include Japanese automakers, and Sumitomo Metal Industries, which is strong in seamless pipes used in the energy, construction and machinery sectors, said they aimed to merge in October 2012.
Nippon Steel and Japan's No.2 JFE Holdings last week cuts their outlooks for the year to March, citing rising costs of coking coal and iron ore.
"INDUSTRY GOLIATHS"
Nippon Steel executives had said the company was looking to deepen cooperation with Sumitomo Metal and Kobe Steel Ltd , with which it has some operational partnerships, but had cited objection from the FTC for its inability to do so.
The merged company would rank No.2 in the world, with a combined crude steel output of 47.8 million tonnes last year, Sumitomo Metal Industries President Hiroshi Tomono said at a news conference in Tokyo. It will employ more than 75,000 people.
That would still be about half the production of top-ranked ArcelorMittal but place the group ahead of Baosteel. Based on 2009 crude steel production, Nippon Steel ranked fourth in the world and Sumitomo Metal placed 19th, according to the World Steel Association.
"These are two industry goliaths. The merger of these two titans of industry looks designed to exceed anything the Chinese can do," said John Meyer, a London-based analyst at investment bank Fairfax.
"The integration...combines the production and technical skills of both companies to produce better-quality products more efficiently and more effectively. Other steel producers will struggle to compete with the new efficiencies of scale and services being offered by the joining of these titans," he added.
Nippon Steel, with a market capitalisation $24 billion, and Sumitomo Metal, valued at $11 billion, already hold minority stakes in each other.
They have not yet decided the merger ratio.
Nippon Steel President Shoji Muneoka told a news conference that he expected the FTC to approve the merger, given that the two firms have different product strengths.
Muneoka also said the relationship with Kobe Steel, in which Nippon Steel holds a stake of 3.4 percent, would be maintained.
Rival JFE said it supported the merger and Japanese Trade Minister Banri Kaieda said it had his blessing.
"The merger aims to strengthen global competitiveness through reorganisations of operations as global competition heats up in the steel industry," he said.
"I value such a move highly because it is line with our 'new growth strategy' aimed at realising a strong economy."
JFE unit JFE Steel was the last major merger in the Japanese steel industry, when Kawasaki Steel and NKK combined in 2002 to form what is now the world's fifth biggest steelmaker. (Additional reporting by Chang-Ran Kim, Yuko Inoue, Chikako Mogi, Nathan Layne in TOKYO, Nick Trevethan in SINGAPORE, Ploy Ten Kate in BANGKOK; Editing by Edwina Gibbs and Lincoln Feast)
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