Companies

Baosteel cuts prices for a 2nd month

(Agencies)
Updated: 2010-07-14 09:45

Baoshan Iron & Steel Co, the biggest publicly traded Chinese steelmaker, cut prices for a second month amid weakening demand from makers of automobiles and appliances.

Prices of low-carbon hot-rolled and some cold-rolled products were slashed by 300 yuan ($44) a metric ton, the Shanghai-based mill said on its trading website Bsteel.com. The steelmaker kept prices of other hot-rolled and cold-rolled grades unchanged.

Steel prices in China, the biggest consumer of the metal, are likely to drop 10 percent for the rest of the year because of high inventory and poor demand, JPMorgan Chase & Co said in a note.

Baoshan Steel fell 2.8 percent to close at 5.98 yuan in Shanghai, extending this year's decline to 38 percent. The benchmark Shanghai Composite Index fell 1.6 percent yesterday. Baoshan Steel also cut prices of some zinc-galvanized sheets by 300 yuan a ton, lowered heavy plate prices by 500 yuan and reduced silicon steel prices by 300 yuan to 500 yuan, it said on the website.

Government measures

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The company last month lowered prices by 300 yuan to 1,000 yuan a ton for July delivery, the first cut in eight months, amid concerns government measures to curb credit growth and speculation in the property market will trim demand.

Steelmakers in the third quarter face price pressures on raw materials and from customers, Baosteel Group Corp, Baoshan's parent, said last week.

Angang Steel Co is also considering cutting August prices by 400 yuan a ton, UC361's analyst Hu Yanping said. Angang hasn't made a final decision for the August prices, she said.