Baosteel increases plate prices for March

Baosteel increases plate prices for March

SteelOrbis Shanghai Baoshan Iron & Steel Company (Baosteel) increased its heavy and medium plate ex-factory prices for March 2006 deliveries. According to the company's announcement on January 19 regarding the prices for forward transactions to be delivered in March 2006, the price of 10.1-50 mm structural steel and 10.1-15 mm shipbuilding plate increased RMB 400/mt ($50). The new price for 15.1-50 mm thick and 2-4 meter long Q235 is RMB 3,500/mt ($434), tax excluded. The new prices are effective as of January 19, 2006. Sources report that the price hike came because Baosteel met some problems regarding its future production. It is learnt that there's something wrong with Baosteel's rolling machines, therefore, they raised prices by large amount against a possible decrease in their supply. The price adjustment has little influence on domestic market prices because these products are generally sold to end users. Furthermore, compared to other similar products, Baosteel's prices were still lower than Wuyang Steel. Both Baosteel and Wuyang Steel have first class products. Baosteel's current price adjustment will influence the exports. China is actively engaging in exporting heavy plates to European countries and the volume exported to South Korea shrank. South Korea is now discussing the heavy plate contract with China, however, the quantity is unlikely to be set under the current market condition. Thus, it's also difficult for South Korea to purchase Chinese shipbuilding plate, because current offers from China for heavy plates are higher that those before. Offers from Nanjin Steel reach $410/mt CFR, while that from Angang reach $440/mt.