Beijing’s investment in infrastructure is improving demand
By Daniel at 9 July, 2009, 12:00 am
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China Business News reported that Wuhan Iron & Steel Co the third largest steelmaker in China raised prices by as much as 12% for August delivery, signaling Beijing’s investment in infrastructure is improving demand
It is the third month the Hubei-based mill has raised ex-works prices.
1. Price for wire rod was increased by CNY 350 per tonne
2. Hot-rolled coil by CNY 240 per tonne
3. Cold-rolled coil by CNY 480 per tonne
4. Commercial plate by CNY 350 per tonne
5. Galvanized steel by CNY 510 per tonne and silicon steel by CNY 650 per tonne.
Steel prices in China have stepped the upward course since mid April. And some medium-and-small-sized mills started to raise prices since May versus the price rise from June at big mills. And in May, 72 large and-medium-sized mills have made a profit of CNY 1.262 billion ending a losing streak of 7 months. However, there are still 25 mills reporting loss. And China steel mills still mired in loss of 3.94 billion in the first five months.
Analysts said “Current profit is merely based on the low-priced iron ore. And according to latest report, the Big Three ore miners have stopped spot ore supplies and started to sale products at the 33% price cut deal. Ore for immediate delivery rose to USD 81 per tonne to USD 83 per tonne on July 1st almost equal with the contract price.”
And officials from Handan Iron & Steel Group’s sales company said the current steel price rise is mainly due to the picking up demand, which stemmed from governments spending in public works. Statistics show demand from major steel-consuming sectors like real estate, railway and auto etc has surged up since the year start.
The official also warned once steel market turns better, production would soar up, and which will buck the steel price rally. Therefore, steel mills should not starry eyed about future market.
(Sourced from MySteel.net)
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