Baoshan Steel Raises Hot Rolled Steel Prices By $ 46 /Ton In April

Baoshan Iron & Steel Co (Baoshan Steel), a division of China's largest steel producer China Baowu Steel Group, has decided to add RMB 300 per tonne ($ 46 per tonne) to its list price for hot rolled carbon steel (HRC). with the company's latest pricing policy published on March 9 for April sales. Coil demand is gradually increasing and mills are making more profits, especially from HRC production.

Following the postponement of March sales prices from February, Baoshan Steel's decision to raise the HRC price again indicates its optimism about market demand and prices in the near future, sources said.

As of March 9, the price is 4.75 mm in 235 sq. M in China also rose by 424 yuan per tonne to 4,940 yuan per tonne, including 13% VAT.

“During the first week of this month, apparent flat steel consumption generally showed a marked recovery, especially for heavy plate and medium steel,” said a trader from Central China. “We can also see a further recovery in domestic and foreign demand,” he told Mysteel Global.

“The decline in production caused by the maintenance of the mills has already led to a reduction in their inventories, while it is very likely that the inventories held by traders will decrease this week or next as demand resumes,” he said. “These fundamentals for HRC are in themselves sufficient reason for steel companies to raise prices,” he added.

Hot rolling mill capacity utilization among 37 steel mills declined for two consecutive weeks as of March 3 by a total of 5.5 percentage points to an average of 81.75%.

But production of hot rolled steel could start to grow earlier than expected, the trader suggested, because currently among the main types of steel, the profitability that mills receive from HRC is almost the highest. In fact, the profitability of hot rolled coils obtained from samples from 91 Mysteel plants across the country averaged 269 yuan per tonne in February, up 301 yuan per tonne month-on-month and finally moved into positive territory. Coil sales margins are comparable to the 113 yuan per tonne mills earn from rebar production, a recent study by Mysteel found.

Meanwhile, for April sales, Baoshan Steel will also add RMB 300 per ton to its carbon steel sheet price list, and profile prices will increase by RMB 200 per ton. Oiled coil prices will rise by RMB 100-150 per year depending on specification, while cold rolled coil prices will rise by RMB 100 per tonne.