Baoshan Iron and Steel Co Ltd (600019.SS), the listed unit of China's largest steelmaker, raised prices for key steel products for March after hiking prices for February that halted five straight months of price declines.
The company raised its sale prices for major hot-rolled and cold-rolled steel products for March by 300 yuan per tonne from February levels, a source with direct knowledge said on Monday.
After the increase, prices for hot-rolled steel products will be 3,742 yuan ($547) per tonne and prices for cold-rolled steel products will be 4,226 yuan ($618) per tonne, the source said.
The price hikes for the next two months reflect Baosteel's bullish outlook on domestic steel prices after the Lunar New Year holidays, as previously, the market was boosted after the break with plants resuming production, said analyst Henry Liu at Macquarie Bank.
Baosteel, in late December, raised prices for key hot-rolled steel products for February by 200 yuan per tonne, while the price for key cold-rolled products was increased by 300 yuan per tonne. (For a table shows Baosteel's price prices, please click on [ID:SHA318094])
Baosteel officials were not immediately available for comment.
However, Daiwa Securities analyst Helen Lau said Baosteel's cold-rolled steel prices for March were still at a slight discount to the current market level, mirroring the company's uncertain outlook on demand from auto and home appliance industries.
Feng Juncong, chief analyst at government-funded metals research group Antaike, told an industry conference on Monday that Baosteel was running only one-third of its galvanizing steel production capacity late last year as demand had weakened in downstream industries.
Baosteel also raised prices of galvanizing steel products, also used in auto and home appliance making, by 350 yuan a tonne for March.
The price hikes show some improvement in the order book. Baosteel's price increase will spur other steel companies to do the same, which will firm up market prices and further restore confidence, Daiwa Securities' Lau said. ($1=6.837 Yuan)
(Editing by Jacqueline Wong)
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