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| Baosteel Cuts Domestic Sales Prices For Nov Shipments |
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China's Baosteel Co Ltd has informed domestic customers of a considerable price reduction across the board in the company's supplies of various steel products for November shipments, it was learned in Tokyo late last week. The price reductions by the ton are Yn800 (US$118) for HR coils, CR coils and electrical sheets; Yn700 (US$103) for hot-dip galvanized sheets and tinplate; Yn300 (US$44) for prepainted hot-dip galvanized sheets; and Yn150 (US$22) for wire rods. As a result, Baosteel's new price of HR coils translates into a level of US$735/ton before value-added tax, a price level that compares with the price practices of China's other major integrated steelmakers such as Wuhan Iron & Steel Group Corp (Wisco) and Anshan Iron & Steel Group Corp (Ansteel). Both Wisco and Ansteel have executed a HR coil price reduction of Yn500-600/ton (US$74-88) for October shipments. There were forecast earlier that Baosteel would make some price revisions of products for November shipments to meet what differs from the price practices of Wisco and Ansteel. But Baosteel's actual price reductions this time are beyond what was forecast. In this connection, Baosteel is thought to have had no option but to slash its sales prices to meet domestic market conditions. Still, it is understood that the current environment in China doesn't necessarily permit increased sales volumes even if prices are held down. For October-December shipments in 2005, too, Baosteel executed major price adjustments such as a price reduction of Yn800/ton for HR coils. The execution led to a downturn of steel market prices in Asia and various steel products came under a fall of prices by nearly US$200/ton, which threw export markets of Asia into confusion. What differs much at present from what happened in 2005 is that few stocks of steel products exist in China, according to market sources. With China's distribution stocks of steel products full to the brim in 2005, Baosteel's price reductions brought domestic market conditions into a breakdown at a stroke. Accordingly, Baosteel's price reductions this time are unlikely to bring a phenomenon in which domestic market prices will decline one after another like a chain reaction, market observers believe. |
| last modified : Fri 26 Sep, 2008 [11:43] |
