BAOSHAN Iron & Steel Co said it won't publicize third-quarter prices for its products, amid government efforts to tame inflation after the earthquake in Sichuan Province and while the iron-ore price talks with Australian miners enter the final stage.
A representative at the mill's board secretary's office said yesterday it has no plan to make any price announcement this time. Baosteel should have publicized third-quarter prices around May 20, but it failed to do so after the government demanded prices of construction materials for rebuilding efforts in the province after the 8.0-magnitude earthquake on May 12 be stable.
The China Iron and Steel Association on Wednesday ordered members to keep prices for products used to build temporary houses in tremor-hit areas unchanged from levels before the earthquake, and to ensure supplies of products like color-coated sheets.
Another Baosteel official said the firm will answer the call to freeze prices related to the quake.
There has been market speculation that Baosteel is raising third-quarter prices by 300 yuan (US$43.50) to 600 yuan per ton to cover rising raw-materials costs. A company source said last week that prices for key products would be raised by 300 yuan a ton, a smaller margin as the mill heeded the government request.
Baosteel raised the price of hot-rolled steel coil by 800 yuan to 4,842 yuan a ton, while cold-rolled coil rose by 800 yuan to 5,596 yuan for the second quarter.
Analysts said it's good for Baosteel to keep a low profile given the current external environment.
"To raise prices every quarter will have a larger accumulation effect than to hike prices every month. Considering the government's clear intention to curb the fast-rising inflation and Baosteel's benchmark role, any big price hikes by Baosteel now may draw criticism," said Tebon Securities analyst Tao Zhifeng.
As China's iron-ore price talks with Australia's BHP Billiton and Rio Tinto are likely to end within the month, too large a hike in steel prices by Baosteel will give the miners an upper hand in the negotiations.