| | Baosteel expects hike in domestic prices |
| |
CreateTime:2008-05-01 Editor:liaoyan
Text Size:
 
|
| |
TOP Chinese mill Baoshan Iron & Steel Co said domestic steel prices are expected to rise in the third quarter on the back of higher costs and strong demand.
In an online briefing with investors yesterday, President Fu Zhongzhe said costs are not likely to fall next quarter, while coal prices may rise further.
Shanghai-based Baosteel posted a better-than-expected 16 percent year-on-year rise in first-quarter earnings late Monday, after raising prices of its major products by up to 8 percent to cover increasing raw-materials costs.
Baosteel has further raised prices by up to 20 percent in the current quarter. Third-quarter prices will be announced around May 20.
"Compared with other metals such as copper and aluminum, the rise in steel prices is not big," said CITIC Securities analyst Zhou Xizeng. "Steel production requires lots of energy, so prices could go higher."
Baosteel's first-quarter net profit nearly doubled that of the final quarter last year when the mill posted a loss in its stainless steel business after nickel prices plunged. The stainless unit has returned to the black in the first quarter, Fu said, after Baosteel gradually digested the nickel inventories which it bought at high prices and by boosting the use of less-costly nickel pig iron to make stainless steel.
Stainless steel and specialty steel accounted for 8 percent of Baosteel's products, according to its 2007 annual report. Baosteel mainly makes carbon steel like hot-rolled and cold-rolled coils and sheets used in cars and appliances. "The stainless steel and special steel sectors will further improve in the second quarter," Fu said.
Fu said Baosteel will shut a blast furnace for maintenance in the fourth quarter, which will cut crude steel output by 1 million tons. In the first quarter, the firm produced 6.1 million tons, he said.
As for the overseas listing plan by its state-owned parent Baosteel Group Corp, Fu said a timetable has yet to be fixed. He said Baosteel has to grow via new plants and takeovers.
Baosteel rose 5.53 percent to 13.92 yuan yesterday in Shanghai. The benchmark index gained 4.82 percent to close at 3,693.11.
|