Baosteel raises ex factory prices for 2nd straight month

Baoshan Iron and Steel Co Ltd, the nation's largest listed steelmaker, on Dec 11 raised ex factory prices of its major products for January delivery.

It is the second consecutive monthly price hike announced by the Shanghai-based steel mill.

The price of hot-rolled coils will rise by 80 yuan ($12.70) per metric ton, and the price of aluminum-zinc coated steel sheets by 100 yuan per ton.

The company's products have seen average price hikes of between 50 yuan and 300 yuan per ton.

"Baosteel's price hike is based on the fact that the overall steel market started to rebound in early September," said Hu Yanping, steel analyst with Umetal.com.

"The improving macro economy and recovery in downstream sectors of the automobile and home electrical appliance markets have generated more raw material purchases, and encouraged Baosteel's bullish expectations," said Hu.

Latest statistics from the China Association of Automobile Manufacturers show that in November the country's automobile output increased 3.9 percent year-on-year to 1.76 million vehicles, up 10.99 percent from a month ago.

Qiu Yuecheng, an analyst from an e-commerce platform, said, "To mark up prices for two consecutive months indicates Baosteel's optimism towards the steel plates market in 2013."

Qiu said exports of steel plates have remained at a high level in recent months.

But some analysts said it is too early to say if the steel market has overcome its difficulties because inventories may rise again with reduced outdoor construction as southern provinces enter the winter season.