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| Eyes On Baosteel's Domestic Steel Prices For Sept Shipments |
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It is a matter of attention how China's Baosteel Co Ltd will settle its domestic sales prices of steel products for September shipments amid soaring prices of spot iron ore imports into the nation. Baosteel depends on imports for its iron ore requirements. Baosteel has told domestic customers that the company intends to execute a major price reduction of Yn500/ton (US$74) for products such as HR coils and CR coils for August shipments. Also, Wuhan Iron & Steel Group Corp and Anshan Iron & Steel Group Corp intend to execute major price reductions of their products for August shipments. As a result, China's domestic market prices have advanced by Yn100-200/ton (US$15-30) for various products in the past two weeks. Besides, differences are dwindling between market prices and steelmakers' quotations. Given the current market conditions at home, there is a high probability that Baosteel will raise what it charges for September shipments as well. For a negative factor, though, spot prices of iron ore imports into China are soaring. The world's various integrated steelmakers including those in Japan have already concluded iron ore price negotiations with Brazil's Value and Australia's BHP Billiton on 2009 shipments. But China's various steelmakers have yet to settle iron price negotiations on what they import for 2009 shipments. As a result, there are signs that some Chinese steelmakers favor spot deals for iron ore imports, in which prices are soaring. China's spot import prices of iron ore hit US$93/MT last week, up from a level of US$80/MT at the beginning of July. It is a matter of time before the spot import prices hit US$100/MT C&F, market observers point out. As far as Baosteel is concerned, if the company negotiates spot iron ore imports at increased prices, it will lead to a vicious circle of an increase in iron ore costs and the ensuring rise in steel prices, market sources believe. |
| last modified : Fri 31 Jul, 2009 [09:55] |
