China's Baoshan Steel Raises HRC Price for Feb Domestic Sales

Baoshan Iron & Steel (Baoshan Steel), the listed-arm of China Baowu Steel Group, announced to raise its domestic sales list prices for carbon steel hot-rolled coil (HRC) further by Yuan 30/tonne ($4.3/t) for February, or a continuity in price rise after a Yuan 200/t increase in January, according to its pricing policy released on January 6.

Baoshan Steel usually does not release the final prices after the adjustments, and the February price increase applies to all its four flat steel plants including the Baoshan works in East China's Shanghai, the Meishan mill in East China's Jiangsu, Qingshan plant in central China's Hubei province, and the Dongshan works in South China's Guangdong province.

Baoshan Steel's latest pricing policy was with market expectation, though the move differed from 2019 when it rolled over its HRC list prices for sales in February, also the first month after the Chinese New Year (CNY) holiday, but it then raised the HRC prices by Yuan 50/t for domestic sales in March 2019.

"China's domestic steel market always witnesses rather robust trading after the week-long CNY holiday, and the firm demand may sustain all the way into April," an official from a steelmaker in East China's Shandong province told Mysteel Global.

"It, thus, is of no surprise for Chinese steel mills to raise prices for February, especially when the HRC fundamentals have appeared healthy at present," he added.

China's national average price for Q235 4.75mm HRC increased further by Yuan 39/t on month to Yuan 3,860/t as of January 6 in contrast to the Yuan 187/t on-month decline in HRB400 20mm dia rebar price to Yuan 3,838/t on the same day, both including the 13% VAT, Mysteel's data showed.

A Shanghai-based steel analyst agreed, adding, "low HRC stocks has propped up the price too, which also makes it unlikely for HRC price to experience sharp downward correction despite the most probable stocks accumulation after the CNY holiday."

As of January 2, HRC stocks with the traders in China's 33 cities under Mysteel's study declined further by 4.3% on month or 6.4% on year to 1.68 million tonnes, only 3.2% higher than the historical low since January 2013 of 1.63 million tonnes as of December 26.

For February, Baoshan Steel announced to raise its list prices for cold-rolled coils and oiled and pickled coils by Yuan 100/t and Yuan 50/t respectively, and that for non-grain oriented electrical steel by Yuan 50-500/t for domestic sales, while it will remain the prices of hot-dipped galvanized steel, electrolytic galvanized steel, and oriented electrical steel unchanged.

~This article has been published under an article exchange agreement between Mysteel Global and SteelMint.