ACCOUNT PROFILE

Baoshan Steel raises Apr HRC prices by $46/t

Posted on 11 March 2021

Baoshan Iron & Steel Co (Baoshan Steel), the listed-arm of China’s top steel producer China Baowu Steel Group, has decided to add Yuan 300/tonne ($46/t) to its list prices of carbon steel hot-rolled coil (HRC) for April sales, according to the company’s latest pricing policy published on March 9. Demand for coils has been picking up gradually, and the mills are enjoying wider profits, especially on making HRC, Mysteel Global noted.

After rolling over its prices for March sales from February, Baoshan Steel’s decision to hike its HRC price again indicates its optimism regarding market demand and prices in the near future, sources remarked.

As of March 9, China’s price of Q235 4.75mm had also moved up Yuan 424/t on month to Yuan 4,940/t including the 13% VAT, Mysteel’s data showed.

“During the first week of this month, apparent consumption of flat steel products showed a marked recovery overall, especially that for HRC and medium plate,” a Central China-based steel trader observed. “We can also see both domestic and overseas demand recovering further,” he told Mysteel Global.

“The decline in production which resulted from the mills conducting maintenance has already led their stocks to decline, while it’s highly possible that inventories held by traders will reverse down this week or next as the demand resumes,” he said. “These fundamentals for HRC alone are sufficient reason for steelmakers to step up their prices,” he added.

Capacity utilization of the hot strip mills among the 37 steelmakers Mysteel samples had decreased for two successive weeks as of March 3 by a total of 5.5 percentage points to average 81.75%.

But hot coil production might reverse up sooner than expected, the trader suggested, because currently among the major steel items, the profit margins the mills are earning on HRC are nearly the largest. In fact, the margins on hot coils enjoyed by the 91 mills Mysteel samples nationwide averaged Yuan 269/t for February, some Yuan 301/t higher on month and finally tipping into positive territory. The coil margin compares with the Yuan 113/t the mills earn on making rebar, Mysteel’s latest survey showed.

Meanwhile, for April sales, Baoshan Steel will also add Yuan 300/t to its list prices of carbon steel plate, while its prices for sections will increase Yuan 200/t. The prices of pickled and oiled coils will increase Yuan 100-150/y depending on specification, and cold-rolled coil will see an uptick of Yuan 100/t in its prices.

On the other hand, the company will keep its prices of hot-dipped galvanized steel, electrolytic galvanized steel, color-coated coil and galvalume unchanged for sales next month.

Source : Mysteel Global