Baosteel price reduction smaller than expected

Baosteel price reduction smaller than expected

Baosteel announced on Tuesday, November 22, its price policy for the first quarter of 2006. The largest decrease in finished steel products will be RMB 1’300/mt ($161), while hot rolled sheet/coil will see a reduction of RMB 700/mt ($87) at most. Broken down specifically, 3.0mm*1000mm*C SS400 prices will be decreased RMB 643/mt ($80) to RMB 2’991/mt ($370), bringing its price with related taxes to RMB 3’500/mt ($433). Cold rolled sheet/coil prices will be down RMB 800/mt ($99), with SPCC prices reduced a further RMB 500/mt ($62). This would mean a RMB 1’300/mt ($161) decrease for 1.0mm*1000mm*C SPCC to RMB 4’086/mt ($506), bringing its price with related taxes to RMB4’780/mt ($592). The decrease range of Baosteel’s prices is smaller than market expectations. When the above-mentioned specifications are compared to similar products in the Shanghai market, Baosteel’s ex-factory prices will be RMB 500/mt ($62) higher for hot rolled products and RMB 700/mt ($87) higher for cold rolled product, including taxes. The hot rolled sheet/coil market in China was stable today, November 22. Although cold rolled product prices decreased, prices of other products were not influenced by the price adjustment by Baosteel. Generally speaking, the lower-than-market expectation decrease of Baosteel should be regarded a factor that will support the weakened market. SteelOrbis Shanghai