Baosteel raises the ex-factory price of steel products or other steel prices

In the continued downturn of the steel industry, Baosteel, which is known as a benchmark in the steel market, raised the ex-factory price of steel for the second time in 2014. On January 13, 2014, Baosteel announced that in February 2014, steel prices, except for electrical steel products, remained unchanged, and most of the remaining products were increased by RMB 50 to RMB 120/t on a monthly basis.

Insiders told reporters that because Baosteel is the leading supplier of automotive sheet metal in China, orders are significantly better than other steel companies, and raw material prices are still at high levels, so they continue to increase their ex-factory prices in February; however, the overall supply and demand situation is still not optimistic. It is expected that prices of other steel companies in February will remain stable at most.

Conversely increase the ex-factory price

Since Baosteel Co., Ltd. raised the ex-factory price in January 2014 on December 10, 2013, on the 13th, Baosteel announced that it would increase the ex-factory price of steel products in February.

The price adjustment policy shows that hot-rolled products are increased by RMB 80/t, CQ-grade mild steel products and non-automotive steels directly subordinate to the plant are increased by RMB 120/t, DQ-grade mild steel is raised by RMB 70/t, and hot-dip galvanized products are increased by RMB 50. / Tons, galvanized products are raised by RMB 100/ton to RMB 150/ton, and galvanized steel is increased by RMB 50/ton; the prices of non-oriented electrical steel and oriented electrical steel remain unchanged.

According to a 2013 performance report released by Baosteel on January 10, 2013 operating income was RMB 190.3 billion, a year-on-year decrease of 0.62%; total profit was RMB 8.02 billion, a year-on-year decrease of 39%; net profit was RMB 5.781 billion, a year-on-year decrease of 44%.

In the view of people in the industry, Baosteel Co., Ltd. adjusted the price, which is an upward trend.

According to the latest data from the China Iron and Steel Association, under the high pressure of environmental protection and low demand, crude steel production in 2013 remained at record highs, reaching 752 million tons, a year-on-year increase of 9.35%.

According to statistics from the National Bureau of Statistics, from January to October 2013, the total profit of the metallurgical industry increased by 39.9% year-on-year (48.3% in the same period of 2012), and the growth rate was 26.2 percentage points higher than that in the first half of the year. However, the industry-wide profit margin was only 2.16%, and the company's loss was down by 2.67 percentage points year-on-year, but it was still as high as 23.4%.

The reporter found that the Ministry of Industry and Information Technology in the recent "2013 China Industrial Communication Industry Operation Report" pointed out that the current steel inventory is still at a relatively high level, and the problem of product homogenization competition is still outstanding, the degree of industrial concentration shows a downward trend, the market supply and demand Contradictions are difficult to reverse in the short term.

Increased sales growth in automobile sales

The industry analysts believe that the increase in car sales in 2013 has boosted Baosteel's price. On January 9, the China Association of Automobile Manufacturers disclosed data that showed that in 2013, the nation’s automobile production and sales volume was 22,116,800 and 21,894,100 units, which represented an increase of 14.8% and 13.9% respectively over the previous year, setting a new record for global production and sales.

"Baosteel, as a leading supplier of automotive sheet materials in China, orders significantly better than other steel mills and has a core competitiveness." Liu Qiuping, chief analyst of the Nisshin Shinkansen, told reporters.

“The better-than-expected automobile development in 2013, and the rapid growth, coupled with the home appliance market has picked up in recent months, have made Baosteel have the ability to raise the price.” Hu Yanping, an analyst at China United Steel Network, told reporters. At the same time, the above-mentioned industry sources believe that raw material prices are at a high level, which also makes it necessary for Baosteel to raise the price to pass the cost.

“The average price of imported iron ore is still above US$130/ton, and supported by overseas weather factors and domestic steel mills' stocking demand at the end of the year, it is difficult for the short-term mine price to fall further.” Liu Qiuping told reporters, “In order to shift the cost pressure, Baosteel There is a need to raise prices."

“Although Baosteel Co., Ltd. is a benchmark in the steel market , this time I am afraid that other steel companies cannot follow suit, because other steel companies are not able to compare, and other steel companies’ price policies in February remain at most stable,” Hu Yanping said.

Liu Qiuping also believes that the price of Baosteel's anti-market price adjustment, other steel companies or hard to adjust prices, "the strong car production and sales and cost factors support Baosteel prices, but other companies estimate it is difficult to follow, because other steel companies are facing Downstream machinery, ships and other needs are not optimistic about the impact."

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